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on Corporate Finance |
| By: | Okeke, Clement Ejiofor |
| Abstract: | The moderating effect of dividend policy on the relationship between corporate social responsibility (CSR) and the financial performance of firms is gradually gaining attention in the literature. However, most of the past works of literature in this area have concentrated on investigating the direct relationship between CSR and dividends or CSR and firm performance. This paper examined the relationship between Corporate Social Responsibility and the Financial Performance of Listed Consumer Goods Firms in Nigeria. and how dividend policy moderates these relationships. The study used an ex post facto research approach and secondary data were retrieved from the annual financial reports of selected consumer goods firms in Nigeria for eleven years from 2013-2022. E-views version 12 was used to carry out correlation and regression analysis of the direct and moderating effects of relevant variables. The study found that dividend payment has a weakening but insignificant moderating effect on the relationship between Community Corporate Social Responsibility (C-CSR) and Return on Capital Employed (ROCE) of listed consumer goods firms in Nigeria. The study also found that dividend payment has a reversing but insignificant moderating effect on the relationship between Employee Relations Corporate Social Responsibility (ER-CSR) and Return on Capital Employed of listed consumer goods firms in Nigeria. The study recommends that managers and board members in the consumer goods industries in Nigeria should seek investments and policies that would create a balance in the social behavior components and dividend policies of the firms since the interests of the shareholders, communities, and employees are key in maintaining impressive financial performance. |
| Keywords: | Corporate Social Responsibility, Return of Capital Employed, Financial Performance, Dividend. |
| JEL: | A1 L0 M0 O1 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123030 |
| By: | Suren Karapetyan (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Matej Bajgar (CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences; Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | Using a difference-in-differences design and a global database of startups, investors and deals, we study the effect of exits (IPOs and acquisitions) of unicorn companies - privately held startups valued over USD 1 billion - on the subsequent investment activity of their investors. We find that an exit by a unicorn startup increases the number of investments by its investors over the following 3 years by about 7.5% and the value of their investments by about 23%, relative to investors in a matched control group. The effects are driven by IPOs and early investors of the exiting unicorns: a unicorn IPO leads, on average, to 2 additional investments and additional USD 13 million invested by each of the unicorn's early investors. Post-exit investments increase both within and outside of the location and the industry of the exited unicorn, but the growth in investments outside the original geography and industry is more pronounced. The results provide evidence of an important mechanism in which a successful investment exit boosts subsequent venture capital activity, but they also indicate that this activity need not be concentrated in the same locations and industries. |
| Keywords: | Unicorn Exits, IPOs, M&As, Early-stage Investors, Startup Ecosystem |
| JEL: | G24 G32 G34 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2025_09 |
| By: | Tiriongo, Samuel; Njino, Roselyne; Mulindi, Hillary |
| Abstract: | Micro, Small and Medium-sized Enterprises (MSMEs) are crucial drivers of economic growth. In Kenya, MSMEs represent about 98 percent of all businesses and contribute over 30 percent to the GDP. Despite their essential role in the economy, these enterprises face substantial challenges in accessing bank finance, thereby hindering their growth and development. On this account, this study uses Kenya Bankers Association (KBA) Inuka Impact survey 2024 data with the propensity score matching and difference in difference analysis to examine the impact of banking sector's intervention program on MSMEs ability to access bank credit. The results shows that size and turnover are critical determinants of MSMEs access to finance, and while the interventions by the Inuka program have yielded some positive results, these efforts need to be extended beyond capacity building and training to achieve a stronger and more sustainable impact. Therefore, policies aimed at supporting MSMEs in Kenya should tailored to the distinct stages of MSMEs development, ensuring that interventions are diversified and comprehensive to drive meaningful outcomes in the economy. |
| Keywords: | Lending, debt capital, SME financing, SMEs, micro-enterprises, Kenya |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kbawps:316412 |
| By: | Okeke, Clement Ejiofor |
| Abstract: | Studies on corporate attributes and the financial performance of firms are increasingly gaining momentum. However, most of the past studies in this area have concentrated on sectors such as banking, agriculture, oil and gas, and consumer goods with limited reviews on the relationship between corporate attributes and financial performance of the industrial goods sector. This study examined the effect of Corporate Attributes on Financial Performance of Listed Industrial Goods Firms in Nigeria. The study used an ex post facto research approach and secondary data were retrieved from the annual financial reports of selected industrial goods firms in Nigeria for eleven years from 2013-2023. E-views version 12 was used to carry out the regression analysis of the direct effect of relevant variables. The study found that corporate attributes do not have a significant effect on the financial performance of listed industrial goods firms in Nigeria.. The study recommends that managers and board members in the industrial goods sectors in Nigeria should consider moderating/reducing their size to control the negative effect such action holds for their financial performance. The study also recommended that the management of industrial goods firms in Nigeria should invest more in activities and programs that promote their management efficiency. |
| Keywords: | Corporate Attributes, Earning Per Share, Financial Performance, Firm Size, Industrial Goods Firms |
| JEL: | F0 F60 L0 M0 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123031 |
| By: | Goodhart, C. A. E.; Postel-Vinay, Natacha |
| Abstract: | The City of Glasgow Bank failure in 1878, which led to large numbers of shareholders becoming insolvent, generated great public concern about their plight, and led directly to the 1879 Companies Act, which paved the way for the adoption of limited liability for all shareholders. In this paper, we focus on the question of why the opportunity was not taken to distinguish between the appropriate liability for ‘insiders, ’ i.e. those with direct access to information and power over decisions, as contrasted with ‘outsiders.’ We record that such issues were raised and discussed at the time, and we report why proposals for any such graded liability were turned down. We argue that the reasons for rejecting graded liability for insiders were overstated, both then and subsequently. While we believe that the case for such graded liability needs reconsideration, it does remain a complex matter, as discussed in Section 4. |
| Keywords: | corporate governance; limited liability; bank risk-taking; financial regulation; financial crises; senior management regime; banks; banking |
| JEL: | G21 G28 G30 G32 G39 N23 K22 K29 L20 |
| Date: | 2024–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:121956 |
| By: | Ryo TAKAOKA; Tomomi MIYAZAKI |
| Abstract: | We examine the effects of corporate tax cuts after 2008 on corporate capital investment. To do this, we estimate investment function based on tax-adjusted Q with cash flow and other control variables. Our empirical results first demonstrate that the corporate tax cuts stimulated capital investment through tax adjusted Q in many corporate tax reforms after the late 2000s. However, the coefficients of tax adjusted Q are well below one, meaning that the quantitative effects of the corporate tax cuts are not substantial. Our second finding is that the effects on capital investment are different depending on the characteristics of firms. We especially reveal that the positive effects are salient with respect to a group of high-growth firms. These results suggest that there are various effects of corporate tax cuts and policy makers should take the heterogeneity of firms into consideration when they craft corporate tax reforms. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:25010 |
| By: | Okeke, Clement Ejiofor |
| Abstract: | Studies on integrated reporting and how it helps firms to resolve different stakeholders’ concerns about corporate disclosures, transparency and accountability are increasingly gaining momentum. Such studies have linked integrated reporting to different outcomes in the financial performances of the firms that have keyed to the reporting system. This study examined the effect of Integrated Reporting (IR) (financial and Manufactured capital) on Financial Performance of Listed Industrial Goods Firms in Nigeria. The study used an ex post facto research approach and secondary data were retrieved from the annual financial reports of selected industrial goods firms in Nigeria for eleven years from 2013-2023.Financial Reporting is the dependent variable proxied by Return on Equity (ROE). IR is the independent variable proxied by Financial Capital and Manufactured Capital. EVIEWS 12 was used to carry out the regression analysis of the direct effect of relevant variables. The study found that Integrated Reporting proxied by financial capital and manufactured capital does not have any significant relationship with the financial performance of firms listed under the industrial goods sector in Nigeria. The study recommends that firms in the industrial goods sector should make concerted efforts to moderate the ratio of their non-current assets to the total assets since the ratio has a negative impact on their performance. |
| Keywords: | Integrated Reporting, Financial Capital, Manufactured Capital, Financial Performance |
| JEL: | E0 L0 L2 L6 M0 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123032 |
| By: | Nina Boyarchenko; Hyuntae Choi; Leonardo Elias |
| Abstract: | The modern financial system is complex, with funding flowing not just from the financial sector to the real sector but within the financial sector through an intricate network of financial claims. While much of our work focuses on understanding the end result of these flows—credit provided to the real sector—we explore in this post how accounting for interlinkages across the financial sector changes our perception of who finances credit to the real sector. |
| Keywords: | real sector lending; financial networks; nonbank financial institutions (NBFIs); intermediated credit |
| JEL: | G21 G32 |
| Date: | 2025–05–12 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:99952 |
| By: | Muthitacharoen , Athiphat (Chulalongkorn University); Paweenawat, Archawa (Puey Ungphakorn Institute for Economic Research, Bank of Thailand); Samphantharak , Krislert (School of Global Policy and Strategy, University of California San Diego) |
| Abstract: | This paper investigates the unintended consequences of size-dependent regulations in small and medium-sized enterprise (SME) promotion policies. We use data from all registered Thai firms to analyze the effects of introducing a revenue cap in the SME tax incentive program qualification. Our study shows a marked bunching of firms just below the cap, illustrating tax salience. We provide evidence suggesting that the bunching is due to real operation responses. A differencein-differences analysis indicates that eligible firms just under the threshold exhibit a significant decline in revenue growth compared to those just above it. This adverse effect is more pronounced among firms with lower pre-policy profitability. We also document substantial negative effects on investment and profitability but find no significant impact on firm survival— challenging the assertion that government support enhances SME survival. Our findings also indicate a marked reduction in the presence of large firms, suggesting broader implications on firm size distribution in the economy. We highlight the double-edged nature of size-based SME policies: while intended to help smaller businesses, the measures may inadvertently suppress growth for firms near the threshold and potentially create resource misallocation. This study underscores the need for a careful policy design that supports SMEs without impeding their potential for growth. |
| Keywords: | size-dependent policy; SMEs; bunching; tax incentives; corporate tax |
| JEL: | G30 H20 K30 L20 L50 |
| Date: | 2025–05–07 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0778 |
| By: | Sehoon Kim; Bernadette A. Minton; Rohan G. Williamson |
| Abstract: | We document that corporate directors’ past experience with abnormally severe climatic natural disasters shape their prosocial preferences and influence firm climate policies. Using detailed data on director career histories and county-level natural disasters, we identify Directors with Abnormal Disaster Experiences (DADEs). DADEs are significantly more likely to be affiliated with nonprofit organizations, consistent with heightened prosocial preferences. Importantly, firms with more DADEs on their boards exhibit lower scope 1 and 2 greenhouse gas emission intensities and are more likely to implement climate-related policies, including board climate oversight, emission targets, and management incentives to reduce emissions. These effects are driven by influential DADEs serving on governance, audit, or ESG committees, but absent among DADEs on finance, compensation, or risk committees, supporting a preference-based rather than risk-based mechanism. Independent directors, rather than the influence of CEOs, play a central role. The effects are stronger when disaster experiences are accumulated over longer histories and in large or high-emission firms. The results are muted in smaller disasters and not driven by recent trends in attention to climate change. Despite the role of preferences, firms with more DADEs do not exhibit worse financial or operational performance. Using director deaths as plausibly exogenous shocks, we provide causal evidence. Our findings show that directors’ experiences heighten their prosocial preferences that lead them to influence corporate climate policy. |
| JEL: | D64 G34 G41 Q54 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33750 |
| By: | Matteo Ghilardi; Roy Zilberman |
| Abstract: | We examine the macroeconomic, asset pricing, and public debt consequences of deficit financing dividend taxation in a dynamic general equilibrium model featuring partial investment irreversibility. Dividend taxes interact directly with the occasionally-binding irreversibility constraint, generating tax-augmented user-cost and hangover channels that both shape investment and debt-to-output fluctuations and account for a sizeable share of their long-run volatilities. Our analysis further reveals that debt-offsetting dividend tax hikes initially trigger investment inactivity through higher user-costs, followed by a surge driven by intertemporal tax arbitrage and hangover effects. Finally, debt-driven dividend tax rules amplify asset price fluctuations while delivering only modest fiscal revenue changes. |
| Keywords: | Dividend Taxation; Investment Frictions; Asset Prices; Deficit Financing; Public Debt. |
| Date: | 2025–05–02 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/083 |
| By: | Adil Boutfssi (Hassan II University - Morocco - University of Hassan II); Tarik Quamar (Hassan II University - University of Hassan II) |
| Abstract: | Moroccan SMEs, which are closely linked to banking institutions to obtain the financing needed for their projects, often find themselves in a situation where these sources of financing are not easily accessible. Indeed, access to credit is often difficult for these categories of companies that are frequently confronted with the phenomenon of total and partial credit rationing. Among the causes of this problem, we can cite the somewhat opaque nature of their information system and their inability to comply with bank financing conditions compared to large companies. This article aims to shed light on the relationship between restrictive bank clauses, including the availability of guarantees, the characteristics of the credit requested and the credit rationing of SMEs in the CASABLANCA-SETTAT region. We conducted a questionnaire survey of 218 SMEs in the same region. Contingency and simple regression tests show that the lack of guarantees is a direct cause of total and partial credit rationing, particularly for small businesses that need significant financing. |
| Abstract: | Les PME marocaines, étroitement liées aux institutions bancaires pour obtenir le financement nécessaire à leurs projets, se trouvent souvent dans une situation où ces sources de financement sont difficilement accessibles. En effet, l'accès au crédit est souvent difficile pour ces catégories d'entreprises qui sont fréquemment confrontées au phénomène de rationnement total et partiel du crédit. Parmi les causes de ce problème, on peut citer le caractère quelque peu opaque de leur système d'information et leur incapacité à se conformer aux conditions de financement bancaire par rapport aux grandes entreprises. Cet article vise à éclairer la relation entre les clauses bancaires restrictives, notamment la disponibilité des garanties, les caractéristiques du crédit demandé et le rationnement du crédit des PME de la région de Casablanca-Settat. Nous avons mené une enquête par questionnaire auprès de 218 PME de la même région. Des tests de contingence et de régression simple montrent que l'absence de garanties est une cause directe de rationnement total et partiel du crédit, en particulier pour les petites entreprises qui ont besoin de financements importants. |
| Keywords: | Moroccan SMEs Information asymmetry Credit rationing Bank financing Bank restrictive clauses Guarantee, Moroccan SMEs, Information asymmetry, Credit rationing, Bank financing, Bank restrictive clauses, Guarantee |
| Date: | 2024–12–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05040737 |
| By: | Alberto Martín (CREI, UPF AND BSE); Sergio Mayordomo (BANCO DE ESPAÑA); Victoria Vanasco (CREI, UPF AND BSE) |
| Abstract: | Governments often support private credit with guarantee schemes, compensating lenders for borrower defaults. Such schemes typically rely on banks allocating guarantees among borrowers, but how banks do so is not well understood. We study this in an economy where entrepreneurial effort, crucial for efficiency, is not contractible, creating a debt overhang problem. Credit guarantees can boost efficiency only if they lower repayment obligations, but their allocation by banks is subject to two distorsions. First, insofar as guarantees are scarce, banks extract rents from all allocated guarantees. Second, banks tilt the allocation of guarantees towards their less productive and highly-indebted borrowers, from whom they can extract even larger rents. Our findings align with evidence from guarantees granted in Spain after the COVID-19 pandemic. |
| Keywords: | credit guarantees, debt overhang, liquidations |
| JEL: | G10 G18 G21 G28 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2523 |