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Article
Publication date: 11 March 2020

Maria Elisabete Neves, Zélia Serrasqueiro, António Dias and Cristina Hermano

This paper aims to analyse the Portuguese companies’ determinants of capital structure. To reach this objective, the authors used data from 37 non-financial Portuguese large…

1614

Abstract

Purpose

This paper aims to analyse the Portuguese companies’ determinants of capital structure. To reach this objective, the authors used data from 37 non-financial Portuguese large enterprises and from 4,233 non-financial small and medium enterprises for the period 2010-2016. Additionally, the authors selected a sub-period from 2010 to 2014 for a deeper understanding of the impact of the sovereign debt crisis and the Economic Adjustment Programme of Troika on the capital structure of those companies.

Design/methodology/approach

Three dependent variables were tested according to debt maturity, and a dynamic panel data model, namely, the generalised method of moments system estimator, was used to test the formulated research hypotheses following Arellano and Bover (1995) and Blundell and Bond (1998) to capture the dynamic nature of the firm’s capital structure decisions.

Findings

In general, the results point out that the capital structure decisions depend on a set of firm-specific factors, and that the effects of the determinants of the debt maturity ratios differ according to the type of firm, i.e. large/small firms, and the economic cycle.

Originality/value

To the best of the authors’ knowledge, this is the first study that has been carried out in Portugal by using two samples of large and small companies for analysing the effects of the Economic Adjustment Programme of Troika on the capital structure of companies. The authors seek to understand which type of companies suffered more because of the effects of the Economic Adjustment Programme of Troika during this period, and which are the capital structure determinants that present greater change. Contrary to what might be expected, large companies are the firms that suffer most from the Economic Adjustment Programme. Probably, because these companies are the most immediate, most scrutinised and those that must show abroad that the bank did not fund them in the long term, because of the imposition and limits to grant credit faced by the banks themselves.

Details

International Journal of Accounting & Information Management, vol. 28 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

Open Access
Article
Publication date: 15 November 2023

Zélia Serrasqueiro, Beatriz Pinto and Filipe Sardo

This study aims to seek to analyse the relationships between profitability, productivity, external debt and growth in SMEs. The authors also analyse firm size and age as…

3203

Abstract

Purpose

This study aims to seek to analyse the relationships between profitability, productivity, external debt and growth in SMEs. The authors also analyse firm size and age as explicative variables of small and medium-sized enterprise (SME) growth.

Design/methodology/approach

In this paper the data were collected for 3309 SMEs for the period 2010–2019. The authors estimate the model using the system generalised method of moments dynamic estimator.

Findings

The results show that after a certain level of profitability, this determinant positively impacts SME growth. Productivity influences positively the firm growth. There is a positive effect of external debt on SME growth, which can be explained by the insufficiency of internally generated funds. The authors obtained a negative signal between size and firm growth, contradicting Gibrat's Law (1931). Moreover, the results suggest that SMEs grow less after a certain age, suggesting that small firms grow less after reaching the minimum scale of efficiency.

Practical implications

For SME owner-managers, this study enhances the importance of profitability and labour productivity for firm growth. For policymakers, the results suggest the need for favourable conditions for SMEs in accessing external finance.

Originality/value

Profitability negatively impacts on SME growth. However, the authors found that above a certain level of profitability, probably, as firms accumulate retained earnings, profitability has a positive effect on SME growth. Moreover, this study shows that labour productivity and debt positively impact on SME growth, evidencing the importance of the availability of financial resources to sustain the growth of these firms.

Details

Journal of Economics, Finance and Administrative Science, vol. 28 no. 56
Type: Research Article
ISSN: 2077-1886

Keywords

Article
Publication date: 16 June 2017

Filipe Sardo and Zelia Serrasqueiro

The purpose of this paper is to analyse if capital structure decisions of small- and medium-sized Portuguese firms are in accordance with the predictions of dynamic trade-off…

1071

Abstract

Purpose

The purpose of this paper is to analyse if capital structure decisions of small- and medium-sized Portuguese firms are in accordance with the predictions of dynamic trade-off theory, more precisely, the speed of adjustment of short-term debt (STD) and long-term debt (LTD) towards the respective target debt ratios.

Design/methodology/approach

Based on two samples of Portuguese firms, 1,377 small-sized firms and 811 medium-sized firms, dynamic estimators were used for the treatment of data obtained from the Amadeus database for the period 2007-2011.

Findings

The results indicate that small- and medium-sized firms adjust their STD and LTD ratios towards the respective target ratios. Small- and medium-sized firms present a high-speed adjustment towards the target STD ratio, suggesting that both types of firm face costs of deviating from the target capital structure, which are, probably, greater than the costs of adjustment associated with STD. However, considering the distance from the target ratio as a determinant of the adjustment speed, the results show the predominance of the negative effect of the costs of adjustment on capital structure adjustment speeds.

Originality/value

The results obtained for the speed of adjustment of STD and LTD, in a recession context, show that for small firms and medium-sized firms, mainly for the former, the costs of external market transactions are prohibitively high, slowing the speed of adjustment towards the target capital structure.

Details

Journal of Small Business and Enterprise Development, vol. 24 no. 3
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 26 June 2018

Filipe Sardo and Zélia Serrasqueiro

The purpose of this paper is twofold: first, to analyse the impact of intellectual capital (IC) and growth opportunities on firms’ financial performance as well as the moderating…

2976

Abstract

Purpose

The purpose of this paper is twofold: first, to analyse the impact of intellectual capital (IC) and growth opportunities on firms’ financial performance as well as the moderating effect of IC on the relationship between growth opportunities and financial performance; and second, to analyse the impact of IC on growth opportunities.

Design/methodology/approach

The current study uses a sample of non-financial listed firms consisting of 14 Western European countries for the period between 2004 and 2015. The estimation method used is specifically the Generalised Method of Moments system (1998) estimator, a dynamic panel estimator.

Findings

The results reveal that the IC efficiency of the current period has a positive impact on the financial performance of high-, medium- and low-tech European firms. A non-linear relationship was found between growth opportunities and financial performance. Also, findings suggest that the positive relationship between growth opportunities and financial performance is enhanced with the efficient use of firms’ IC. Results indicate that the efficient use of IC in the current period has a greater impact on growth opportunities in high firms. Additionally, results reveal the presence of a non-linear relationship between ownership concentration and growth opportunities.

Originality/value

The current study contributes to the current literature by exploring a sample of firms across Western European countries, which is divided among high-, medium- and low-tech firms. The econometric modelling enables the author to conduct a longitudinal study.

Details

Journal of Intellectual Capital, vol. 19 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 12 January 2024

Maria Neves, Catarina Proença, Beatriz Cancela and Zelia Serrasqueiro

The purpose of this study is to examine the determinants of the level of indebtedness in the health sector in Portugal, taking into account the effects of the COVID-19 pandemic…

Abstract

Purpose

The purpose of this study is to examine the determinants of the level of indebtedness in the health sector in Portugal, taking into account the effects of the COVID-19 pandemic. At the same time, an attempt is made to understand whether the effect of a pandemic crisis is similar to that of a financial crisis.

Design/methodology/approach

To achieve this aim, two subperiods were analyzed: a global period between 2011 and 2020 that includes the pandemic crisis and the period between 2011 and 2014, designated as the financial assistance period by the “Troika” in Portugal. For a sample of 514 companies belonging to the NACE code: 86100 – activities of the health sector with hospitalization, the panel data methodology was applied, specifically, the generalized method of moments system proposed by Arellano and Bover (1995) and Blundell and Bond (1998).

Findings

The results of the study are in line with the Pecking-order explanatory theory, demonstrating that companies in this sector follow a financing hierarchy, preferentially resorting to internally generated funds and external debt. Additionally, the results reveal that the capital structure of companies has changed due to the COVID-19 pandemic. As for the period of financial assistance, there are no major differences in evidence when the total debt ratio is considered. The results suggest different impacts when it comes to a bear market period caused by a health crisis or a period of growing economic slowdowns.

Originality/value

As far as we know, this is the first study that analyses the debt levels in the context of the health sector in a country with a financial system based on the bank sector, using short- and long-term debt ratios, taking into account the particularities of two different moments considered to be bear market that may eventually be useful for comparison with other bear market moments in other macroeconomic environments.

Propósito

El objetivo principal de este estudio es examinar los determinantes del nivel de endeudamiento en el sector de la salud en Portugal, teniendo en cuenta los efectos de la pandemia de COVID-19. Al mismo tiempo, se intenta comprender si el efecto de una crisis pandémica es similar al de una crisis financiera.

Diseño/metodología/enfoque

Para lograr este objetivo, se analizaron dos subperíodos: un período global entre 2011 y 2020 que incluye la crisis pandémica y el período entre 2011 y 2014, designado como el período de asistencia financiera por la “Troika” en Portugal. Para una muestra de 514 empresas pertenecientes al código NACE: 86100 – actividades del sector de la salud con hospitalización, se aplicó la metodología de datos de panel, específicamente, el método generalizado de momentos (GMM)-sistema propuesto por Arellano y Bover (1995) y Blundell y Bond (1998).

Resultados

Los resultados del estudio están en línea con la teoría explicativa del “Pecking-order”, demostrando que las empresas en este sector siguen una jerarquía de financiamiento, recurriendo preferentemente a fondos generados internamente y deuda externa. Además, los resultados revelan que la estructura de capital de las empresas ha cambiado debido a la pandemia de COVID-19. En cuanto al período de asistencia financiera, no hay diferencias significativas en la evidencia cuando se considera la proporción total de deuda. Los resultados sugieren impactos diferentes cuando se trata de un período de mercado bajista causado por una crisis de salud o un período de crecimiento económico más lento.

Originalidad/valor

Hasta donde sabemos, este es el primer estudio que analiza los niveles de deuda en el contexto del sector de la salud en un país con un sistema financiero basado en el sector bancario, utilizando ratios de deuda a corto y largo plazo, teniendo en cuenta las particularidades de dos momentos diferentes considerados como momentos de mercado bajista que eventualmente pueden ser útiles para comparar con otros momentos de mercado bajista en otros entornos macroeconómicos.

Objetivo

O principal objetivo deste estudo é examinar os determinantes do nível de endividamento no setor de saúde em Portugal, levando em consideração os efeitos da pandemia de COVID-19. Ao mesmo tempo, tenta-se compreender se o efeito de uma crise pandêmica é semelhante ao de uma crise financeira.

Design/metodologia/abordagem

Para atingir esse objetivo, foram analisados dois subperíodos: um período global entre 2011 e 2020, que inclui a crise pandêmica, e o período entre 2011 e 2014, designado como o período de assistência financeira pela “Troika” em Portugal. Para uma amostra de 514 empresas pertencentes ao código NACE: 86100 – atividades do setor de saúde com hospitalização, foi aplicada a metodologia de dados em painel, especificamente o método generalizado de momentos (GMM)-sistema proposto por Arellano e Bover (1995) e Blundell e Bond (1998).

Resultados

Os resultados do estudo estão de acordo com a teoria explicativa da ordem de preferência (“Pecking-order”), demonstrando que as empresas neste setor seguem uma hierarquia de financiamento, recorrendo preferencialmente a fundos gerados internamente e dívida externa. Além disso, os resultados revelam que a estrutura de capital das empresas mudou devido à pandemia de COVID-19. No que diz respeito ao período de assistência financeira, não há diferenças significativas na evidência quando se considera a proporção total de dívida. Os resultados sugerem impactos diferentes quando se trata de um período de mercado em baixa causado por uma crise de saúde ou um período de desaceleração econômica.

Originalidade/valor

Até onde sabemos, este é o primeiro estudo que analisa os níveis de dívida no contexto do setor de saúde em um país com um sistema financeiro baseado no setor bancário, utilizando índices de dívida de curto e longo prazo, levando em consideração as particularidades de dois momentos diferentes considerados como momentos de mercado em baixa que eventualmente podem ser úteis para comparação com outros momentos de mercado em baixa em outros ambientes macroeconômicos.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 22 no. 1
Type: Research Article
ISSN: 1536-5433

Keywords

Article
Publication date: 10 January 2024

António Carvalho, Luís Miguel Pacheco, Filipe Sardo and Zelia Serrasqueiro

The behavioural theory adds a new paradigm of analysis with the assumptions of the decision maker’s cognitive biases and their repercussions on financing decisions. The aim of the…

Abstract

Purpose

The behavioural theory adds a new paradigm of analysis with the assumptions of the decision maker’s cognitive biases and their repercussions on financing decisions. The aim of the study is to analyse the repercussions of these biases on the adjustment speed of firm’s capital structure toward the optimal level.

Design/methodology/approach

Based on a partial adjustment model, the study uses the Dynamic Panel Fractional estimator to analyse panel data from 4,990 Portuguese entrepreneurial firms.

Findings

The results show that the cognitive overconfidence bias impacts the entrepreneurial firm’s capital structure. In fact, the firms run by overconfident managers adjust more slowly than their counterparts. Furthermore, the findings suggest that entrepreneurial firms make relatively fast adjustments toward the optimal debt level and follow a hierarchical financing order in the funding process.

Practical implications

The results of this paper are not only interesting to the academia, but also contain practical implications for corporate, institutional and business policy and governance. First, the paper introduces a new measure of cognitive bias in optimistic managers, which is useful for current and future academic research. Also, in practical terms, the findings of the paper reveal that when a company is contemplating hiring a manager, it should consider whether they need an optimistic or non-optimistic manager based on the company's present life cycle or situation.

Originality/value

The current analysis extends the existing literature. The study suggests that financial classical and behavioural paradigms should not be separated, which can provide evidence to help narrow the gap between these two major perspectives.

Details

Journal of Small Business and Enterprise Development, vol. 31 no. 1
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 16 August 2021

Flávio Morais, Zélia Serrasqueiro and Joaquim J.S. Ramalho

The purpose of this paper is to investigate whether the effect of country and corporate governance mechanisms on zero leverage is heterogeneous across market- and bank-based…

Abstract

Purpose

The purpose of this paper is to investigate whether the effect of country and corporate governance mechanisms on zero leverage is heterogeneous across market- and bank-based financial systems.

Design/methodology/approach

Using logit regression methods and a sample of listed firms from 14 Western European countries for the 2002–2016 period, this study examines the propensity of firms having zero leverage in different financial systems.

Findings

Country governance mechanisms have a heterogeneous effect on zero leverage, with higher quality mechanisms increasing zero-leverage propensity in bank-based countries and decreasing it in market-based countries. Board dimension and independency have no impact on zero leverage. A higher ownership concentration decreases the propensity for zero-leverage policies in bank-based countries.

Research limitations/implications

This study’s findings show the importance of considering both country- and firm-level governance mechanisms when studying the zero-leverage phenomenon and that the effect of those mechanisms vary across financial and legal systems.

Practical implications

For managers, this study suggests that stronger national governance makes difficult (favours) zero-leverage policies in market (bank)-based countries. In bank-based countries, it also suggests that the presence of shareholders that own a large stake makes the adoption of zero-leverage policies difficult. This last implication is also important for small shareholders by suggesting that investing in firms with a concentrated ownership reduces the risk that zero-leverage policies are adopted by entrenched reasons.

Originality/value

To the best of the authors’ knowledge, this is the first study to consider simultaneously the effects of both country- and firm-level governance mechanisms on zero leverage and to allow such effects to vary across financial systems.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 9 October 2017

Filipe Sardo and Zélia Serrasqueiro

The purpose of this paper is to analyze the relationship between firms’ intellectual capital (IC), financial performance (FP) and market value (MV) as well as the relationship…

2563

Abstract

Purpose

The purpose of this paper is to analyze the relationship between firms’ intellectual capital (IC), financial performance (FP) and market value (MV) as well as the relationship between ownership concentrations on IC performance.

Design/methodology/approach

A large sample of non-financial listed firms belonging to 14 countries in Western Europe, for the period between 2004 and 2015, was investigated using the GMM system (1998) dynamic estimator and the effect of lagged explanatory variables on firm’s FP and MV.

Findings

The results reveal that IC is an important resource for firms’ value creation. Human capital is found to be a key factor of firms’ wealth. Results show that capital employed efficiency positively impacts on firms’ FP in the short run. The impact of IC components on firms’ MV may not be immediate. The structural capital positively affects firms’ FP in the long run. Also, the results reveal that ownership concentration and owners’ management involvement constrain firms’ IC performance.

Originality/value

The current study contributes to IC research by exploring a large sample of firms across countries in Western Europe using econometric modeling. Considering that the effect of IC on firms’ FP needs time to be realized, thus to be measured, the effect of lagged explanatory variables on performance was tested, using dynamic panel estimators, specifically the GMM system (1998) dynamic estimator.

Details

Journal of Intellectual Capital, vol. 18 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 11 October 2021

Isabel Cristina Panziera Marques, Zélia Serrasqueiro and Fernanda Nogueira

The global pandemic has had a considerable effect on organisations’ performance and development and on the daily lives of the general population. This study aims to analyse the…

Abstract

Purpose

The global pandemic has had a considerable effect on organisations’ performance and development and on the daily lives of the general population. This study aims to analyse the recent literature on the topics of Covid-19 and sustainability and proposes to rethink and redefine sustainability with the intersection of human health as a fourth sustainable pillar.

Design/methodology/approach

Using the Scopus and ISI Web of Science databases, 119 articles were analysed in detail and classified according to concepts and principles for achieving sustainable development, based on the Brundtland Report, 1987.

Findings

The results indicate a high number of publications in the social dimension, with a relevant proportion of studies in the health sector. This study allows us to conclude that all sectors of society are being affected by the pandemic. However, the enormous tension and the immediate impact felt by the health sector during the pandemic reflect directly on the population, and there are clear signs that in the medium and long term, instability and uncertainty in the environmental, economic and social dimensions will remain. In national health systems, monitoring, innovating in human resource management and investing in information technology can ensure organizations’ reliability and sustainability. The conclusion involves the suggestion of introducing health as a new pillar for sustainability to consolidate the basis and structure of the United Nations’ Sustainable Development Objectives. The use of fundamental concepts is necessary and must be aligned to reassess the results obtained in studies, in comparison with observational data.

Practical implications

The implications arising from the inclusion of health as a fourth pillar of sustainability are diverse. The need to build a new theoretical and conceptual framework for sustainability derives from the fact that health reflects the concern of many postulants in this field of practices. The determining or conditioning conditions of the observed effects of the pandemic by COVID-19, whether situated simply as factors and/or economic, environmental or social reflexes that precede them, requires a conceptual development that allows its approach, as a complex object, whose determinations are subject to variable degrees of uncertainty and diversity.

Originality/value

This study aims to redefine the concept of sustainability, considering that health has become a public health emergency of international interest. Health affects the supply chain, cash flow, interferes with the educational format and interrupts the workforce’s routine, among other aspects, showing the true nature of its importance and its impact in all spheres (economic, environmental and social).

Details

Social Responsibility Journal, vol. 18 no. 8
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 31 March 2021

Filipe Sardo and Zélia Serrasqueiro

This study seeks to analyse the determinants of working capital of manufacturing small and medium-sized enterprises (SMEs), particularly the effect of the probability of financial…

1189

Abstract

Purpose

This study seeks to analyse the determinants of working capital of manufacturing small and medium-sized enterprises (SMEs), particularly the effect of the probability of financial distress on working capital.

Design/methodology/approach

Using panel data models, the authors analyse a sample of 3994 manufacturing SMEs for the period 2011–2017.

Findings

The results suggest that SMEs pursue conservative working capital management to avoid the failure to fulfil the commitments with creditors. Also, the positive impact of the probability of financial distress on SME working capital suggests that SMEs exposed to a higher probability of bankruptcy invest more in working capital to avoid the risk of default and financing imbalance.

Originality/value

The novelty of this study is to extend the consequences of aggressive or conservative working capital management by analysing the probability of financial distress on working capital.

Details

Journal of Economic Studies, vol. 49 no. 3
Type: Research Article
ISSN: 0144-3585

Keywords

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