Determinants of Corporate Performance: Modelling Approach
DOI:
https://doi.org/10.12775/DEM.2017.007Keywords
capital structure, efficiency, panel data modelling, ROA, ROEAbstract
This study is to investigate the influence of the selected factors of the capital structure on the corporate performance. An empirical analysis covers a sample of 90 non-financial companies traded on the Warsaw Stock Exchange, in the period of 2000-2015. The panel data models for two corporate performance measures such ROA and ROE were estimated. The company’s capital structure negatively affects its performance. It is in line with pecking order theory and previous studies on capital structure of Polish companies.
References
Addae, A.A., Nyarko-Baasi, M., Hughes, D. (2013), The Effects of Capital Structure on Prof-itability of Listed Firms in Ghana, European Journal of Business and Management, Vol.5, No.31, 215-229.
Bandyopadhyay, A., Barua, N.M. (2016), Factors determining capital structure and corporate performance in India: Studying the business cycle effects, The Quarterly Review of Eco-nomics and Finance, 61, 160-172, https://dx.doi.org/10.1016/j.qref.2016.01.004
Benerje A., De A. (2014), Determinants of Corporate Financial Performance Relating to Capital Structure Decisions in Indian Iron and Steel Industry: An Empirical Study, Paradigm, 18(1), 35-50, https://dx.doi.org/ 0.1177/0971890714540365
Cameron, K.S., Whetten, D.A. (1983), Organizational effectiveness: One model or several? In K. S. Cameron and D.A. Whetten (eds.), Organizational Effectiveness: A comparison of multiplie methods, New York, Academic Press, 1-24.
Chakravarthy, B. S. (1986), Measuring Strategic Performance, Strategic Management Journal, 7, 437-58.
Chen J., Strange, R. (2005), The Determinants of Capital Structure: Evidence from Chinese Listed Companies, Economic Change and Restructuring, 38, 11–35, https://dx.doi.org/ 10.1007/s10644-005-4521-7.
Donaldson, G. (1961), Corporate Debt Capacity: A Study of Corporate Debt Policy and the Determinants of Corporate Debt Capacity, Division of Research, Boston, Harvard Grad-uate School of Business Administration.
Demsetz, H., Villalonga, B. (2001), Ownership structure and corporate performance, Journal of Corporate Finance, 7, 209–233.
Fama, E. (1985), What’s different about banks?, Journal of Monetary Economics, 15(1),29–39.
Gosh, S. (2008), Leverage, foreign borrowing and corporate performance: firm-level evidence for India, Applied Economics Letters, 15, 607–616, https://dx.doi.org/ 10.1080/13504850600722047.
Gupta, P., (2015), An empirical study of relationship between capital structure and profitability of foreign promoters holding companies in India, Management Edge, Vol. 8, No. 1, 80-91.
Hadlock, C. J., James, C. M. (2002), Do Banks Provide Financial Slack? Journal of Finance, 57, 1383–420.
Hamrol, M., Sieczko, J. (2006), Czynniki kształtujące strukturę kapitału polskich spółek gieł-dowych, Prace i Materiały Wydziału Zarządzania Uniwersytetu Gdańskiego, nr 1, 127-142.
Harvey, C. R., Lins, K. V. and Roper, A. H. (2001), The effect of capital structure when ex-pected agency costs are extreme, NBER Working Article No. 8452, Cambridge, MA.
Hax, A.C., Majluf, N.S. (1984), Strategic Management: An integrative perspective, New York, Prentice-Hall.
Hoffer, C. W., Sandberg, W. R. (1987), Improving new venture performance: some guidelines for success, American Journal of Small Business, 12, 11-25.
Igbinosa, S. (2015), Another Look at Capital Structure and Corporate Performance in Emerging Markets: The Case of Nigeria, Asian Journal of Business Management, 7(1), 1-12.
Jensen M.C., Meckling W.H. (1976), The Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, Journal of Financial Economics, vol. 3, no. 4, 305–360.
Jędrzejczak-Gas, J., (2014), Influence of the selected factors on the capital structure of enter-prises in the construction industry, Management, 18(1), 241-254.
Kester, W. C. (1986), Capital and Ownership Structure: A Comparison of United States and Japanese Manufacturing Corporations, Financial Management, 15(1), 5–16.
Lewellen, W. G., Roden, D. M. (1995), Corporate Capital Structure Decisions : Evidence from Leveraged Buyouts, Financial Management, 24(2), 76–87.
Margaritis, D., Psillaki, P. (2010),Capital structure, equity ownership and firm performance, Journal of Banking & Finance, 34, pp. 621– 632, https://dx.doi.org/ 10.1016/j.jbankfin.2009.08.023.
Myers S.C. (1977), Determinants of Corporate Borrowing, Journal of Financial Economics, vol. 5, no. 2, 147–175.
Myers S.C. (1984), The Capital Structure Puzzle, Journal of Finance, vol. 39, no. 3, 575–592.
Myers, S.C., Majluf N.S. (1984), Corporate Financing and Investment Decisions When Firms Have Information That Investors Do Not Have, Journal of Financial Economics, 13 (2), 187–222.
Nawaz, A., Ali, R., Naseem M.A. (2011), Relationship between Capital Structure and Firms Performance: A Case of Textile Sector in Pakistan, Global Business and Management Research: An International Journal, 3(4), 270-275.
Rajan, R.G., Zingales, L. (1995), What Do We Know about Capital Structure? Some Evidence from International Data, The Journal of Finance, vol. L, no. 5, 1421-1460.
Ross, S. (1977), The determination of financial structures: an incentive signalling approach, Bell Journal of Economics, 8, 23–40.
Santos, J. B., Brito, L.A.L. (2012), Toward a Subjective Measurement Model for Firm Perfor-mance, Brazilian Administration Review, 9, 95-117.
Van Essen, M., Carney, M., Gedajlovic, E.R., Heugens, P.P.M.A.R. (2015), How does Family Control Influence Firm Strategy and Performance? A Meta-Analysis of US Publicly Listed Firms, Corporate Governance: An International Review, 23(1), 3–24.
Venkatraman, N., Ramanujam, V. (1986), Measurement of business performance in strategy research: a comparison of approaches, Academy of Management Review, 1(4), 801-814.
Wagner, J. (1995), Exports, firm size, and firm dynamics, Small Business Economics,7(1), 29–39.
Wilimowska, Z., Wilimowski, M. (2010), Wpływ czynników mikroekonomicznych na zarzą-dzanie strukturą kapitałową polskich przedsiębiorstw, In R. Knosala (Ed.), Kompute-rowo zintegrowane zarządzanie, t. 2, Opole: Oficyna Wydawnicza Polskiego Towarzy-stwa Zarządzania Produkcją.
Wiwattanakantang, Y. (1999), An empirical study on the determinants of the capital structure of Thai firms, Pacific-Basin Finance Journal, 7(3-4), 371–403.
Yinusa O.G., Somoye R.O.C., Alimi O.Y., Ilo B.M., (2016), Firm Performance and Capital Structure Choice of Firms: Evidence from Nigeria, Journal of Knowledge Globalization, Vol. 9, No 1, 1-16.
Zeitun, R. and Tian, G. G. (2007), Capital structure and corporate performance: evidence from Jordan, Australasian Accounting, Business and Finance Journal, 1(4), 1-24.
Downloads
Published
How to Cite
Issue
Section
License
The journal provides an Open Access to its content based on the non-exclusive licence Creative Commons (CC BY-ND 4.0).
To enable the publisher to disseminate the author's work to the fullest extent, the author must agrees to the terms and conditions of the License Agreement with Nicolaus Copernicus University.
Stats
Number of views and downloads: 458
Number of citations: 0
