Non-linear Panel Data Analysis for Capital Structure and Its Impact on Profitability
Journal Title: The Review of Finance and Banking - Year 2016, Vol 8, Issue 1
Abstract
This paper intends to establish the determinants of financial performance in 125 companies listed on the Bucharest Stock Exchange, over the 2003-2012 period. The analysis is based on descriptive analysis, linear and non-linear regression analysis. Return on assets, as performance proxy, is regressed on endogenous and exogenous variables. Results indicate that Romanian companies register higher returns when they operate with limited borrowings. Tangibility has a negative impact on return on assets, as long as investments are made from internal funds, affecting the level of earnings over short-term. The current financial crisis affects corporate performance, while inflation rates induce a loop effect in returns along with their fluctuation.
Authors and Affiliations
SORANA VATAVU
Keywords
Related Articles
- EP ID EP592268
- DOI -
- Views 188
- Downloads 0
Turn-of-the-month and day-of-the-week patterns: two for the price of one? The Romanian situation
Numerous studies investigated patters in daily stocks returns, considering many possible manifestations, like the day-of-the-week (DOW) and turn-of-the-month (TOM)effects. This study analyses the possibility that they re...
Internal Financial Markets and Corporate Investment Strategies in Africa — A Case Study of Mauritius
This Paper confirms that, in a pre-financial crisis environment, alternative forms of corporate arrangements and operation of internal financial markets impact differently on corporate investment decisions, tested in het...
The Interval Effect in Estimating Beta: Empirical Evidence from the Romanian Stock Market
This study presents empirical evidence regarding the interval e¤ect in estimation of beta coeffcients for stocks listed on the Bucharest Stock Exchange. Employing the standard market model, this paper finds that beta est...
Discrete Portfolio Adjustment with Fixed Transaction Costs
This paper presents a closed-form solution to the portfolio adjustment problem in discrete time when an investor faces fixed transaction costs. This transaction cost model assumes a mean-variance investor who wants to ad...
Assessing competition in the European Union banking sector
The current paper provides new insights on competition degree among 2,024 commercial, cooperative and savings banks from the 28 European Union states during 2005-2015. Bank-level Lerner index, its efficiency-adjusted for...