Role of Business Age, Scale & Risk in Debt Financing Choices for the Pakistani Textile & Apparel Industry

• Autorzy: Zahid Bashir , Muhammad Usman Arshad , Muhammad Asif , Muhammad Abbas , Hasnain Ali
• Języki publikacji: EN

Abstrakty

EN

The motivation for this research enquiry is to identify the role of the business age, size and risk for the choice of debt financing in the textile and apparel sector of Pakistan along with other controlled factors. The textile and apparel sector of Pakistan comprises 464 listed entities as the targeted population while the study randomly finalized 60 firms as the sample after carefully analyzing the required information from the financial statements during the annual revenue streams of 2013-2019. The predicted variable for this research enquiry is measured by short, long and total-debt ratios while the predictor variables include the business age, firm's scale and risk. In addition, the research includes tax shield, tangibility, liquidity, profitability, and growth as the controlling factors. The study estimated that the choice of total-debt ratio is strongly affected by business age, size and risk along-with tax shield, tangibility, liquidity and profitability while the choice of short-term debt ratio mainly depends upon the firm's scale and age along with the tax shield. In addition, the choice of long-term debt ratio is strongly explained by the firm's scale and age along with the tax shield, liquidity and profitability. The estimated evidence provides management with the implications for the textile and apparel sector of Pakistan to consider as significant factors in deciding the debt financing choice of this sector. The estimated evidence of this research enquiry applies to the non-financial textile sector only and cannot be generalized to the financial sector. Future research may enhance the financing choice towards the inclusion of equity financing with the same set of variables. (original abstract)

Słowa kluczowe

EN

Risk; Debt; Debt management; Textile industry; Clothing industry

PL

Ryzyko; Dług; Zarządzanie długiem; Przemysł włókienniczy; Przemysł odzieżowy

• Czasopismo: e-Finanse
• Rocznik: 2020
• Tom: 16
• Numer: nr 3
• Strony: 119--136

Twórcy

autor

Zahid Bashir

• University of Gujrat, Pakistan

autor

Muhammad Usman Arshad

• University of Gujrat, Pakistan

autor

Muhammad Asif

• University of Gujrat, Pakistan

autor

Muhammad Abbas

• University of Gujrat, Pakistan; student

autor

Hasnain Ali

• University of Gujrat, Pakistan; student

Bibliografia

• Abor, J. (2007). Industry Classification and the Capital Structure of Ghanaian SMEs. Studies in Economics and Finance, 24(3), 16. doi: 10.1108/10867370710817392
• Abor, J., Biekpe, N. (2009). How do We Explain the Capital Structure of SMEs in Sub-Saharan Africa? Evidence from Ghana. Journal of Economic Studies, 36(1), 18. doi: 10.1108/01443580910923812
• Ahmed Sheikh, N. (2011). Determinants of Capital Structure An Empirical Study of Firms in Manufacturing Industry of Pakistan. Managerial Finance, 37(2), 21. doi: 10.1108/03074351111103668
• Ahmed Sheikh, N. (2017). Determinants of Capital Structure of Islamic and Conventional Commercial Banks Evidence from Pakistan. International Journal of Islamic and MiddleEastern Financeand Management, 10(1), 20. doi: 10.1108/IMEFM-10-2015-0119
• Ahmed Sheikh, N., Wang, Z. (2011). Determinants of Capital Structure An Empirical Study of firms in Manufacturing Industry of Pakistan. Managerial Finance, 37(2), 21. doi: 10.1108/03074351111103668
• Alipour, M., Farhad Seddigh Mohammadi, M., Derakhshan, H. (2015). Determinants of Capital Structure: an Empirical Study of Firms in Iran. International Journal of Lawand Management, 57(1), 33. doi: 10.1108/IJLMA-01-2013-0004
• Chadha, S., Sharma, K.A. (2015). Determinants of Capital Structure: an Empirical Evaluation from India. Journal of Advances in Management Research, 12(1), 14. doi: 10.1108/JAMR-08-2014-0051
• Chen, J., Jiang, C., Lin, Y. (2014). What Determine Firms' Capital Structure in China? Managerial Finance, 40(10), 18. doi: 10.1108/MF-06-2013-0163
• Doukas, A.J., Zhou, B. (2011). 'Hot' Debt Markets and Capital Structure. European Financial Management, 17(1), 54. doi: 10.1111/j.1468-036X.2010.00549.x
• Ehalaiye, D., Botica-Redmayne, N., Laswad, F. (2017). Financial Determinants of Local Government Debt in New Zealand. Pacific Accounting Review, 29(4), 23. doi: 10.1108/IJSE-03-2016-0089
• Hall, G., Hutchinson, P., Michaelas, N. (2010). Industry Effects on the Determinants of Unquoted SMEs' Capital Structure. International Journal of the Economics of Business, 17. doi: 10.1080/13571510050197203
• Koksal, B., Orman, C. (2015). Determinants of Capital Structure: Evidence from a Major Developing Economy. Small Business Economics, 44(2), 1- 51.
• Koralun-Bereźnicka, J. (2017). Firm Size and Debt Maturity as Indirect Determinants of Capital Structure: Evidence form European Panel Data. Applied Economics Letters, 5. doi: 10.1080/13504851.2017.1420869
• Kumar, S., Colombage, S., Rao, P. (2017). Research on Capital Structure Determinants: a Review and Future Directions. International Journal of Managerial Finance, 13(2), 29. doi: 10.1108/IJMF-09-2014-0135
• Laurent Viviani, J. (2008). Capital Structure Determinants: an Empirical Study of French Companies in the Wine Industry. International Journal of Wine Business Research, 20(2), 27. doi: 10.1108/17511060810883786
• Li, H., Stathis, P. (2017). Determinants of Capital Structure in Australia: an Analysis of Important Factors. Managerial Finance, 43(8), 18. doi: 10.1108/MF-02-2017-0030
• González Méndez, M.V. (2014). Determinants of Debt Maturity Structure Across Firm Size. Spanish Journal of Finance and Accounting, 24. doi: 10.1080/02102412.2013.10779745
• Bhaird, mac an, C., & Lucey, B. (2010). Determinants of Capital Structure in Irish SMEs. Small Business Economics, 35(3). doi: 10.1007/s11187-008 -9162-6
• Öhman, P., Yazdanfar, D. (2017 ). Short- and Long-term Debt Determinants in Swedish SMEs. Review of Accounting and Finance, 16 (1), 20. doi: 10.1108/RAF-08-2015-0118
• Silva Serrasqueiro, M.Z., Rêgo Rogão, C.M. (2009). Capital Structure of Listed Portuguese Companies Determinants of Debt Adjustment. Review of Accounting and Finance, 24. doi:10.1108/14757700910934238
• Renato Soares Terra, P. (2011). Determinants of Corporate Debt Maturity in Latin America. European Business Review, 23(1), 28. doi: 10.1108/09555341111097982
• Sardo, F., Serrasqueir, Z. (2017). Does Dynamic Trade-off Theory Explain Portuguese SME Capital Structure Decisions? Journal of Small Business and Enterprise Development, Vol. 24 (No. 3,), 19. doi: 10.1108/JSBED-12-2016-0193
• Seo, K., Eun Kyoo Kim, E., Sharma, A. (2017). Examining the Determinants of Long-term Debt in the US Restaurant Industry: Does CEO Overconfidence Affect Debt Maturity Decisions. International Journal of Contemporary Hospitality Management, 29(5), 21. doi: 10.1108/IJCHM-06 -2015-0274
• Serrasqueiro, Z. (2011). Are Capital Structure Decisions of Service SMEs Different? Management Research Review, 34(1), 26. doi: 10.1108/01409171111096469
• Serrasqueiro, Z. (2011). Are Capital Structure Decisions of Service SMEs Different? Empirical Evidence from Portugal. Management Research Review, 34(1), 26. doi: 10.1108/01409171111096469
• Sung, T., Park, D., Young Par, K. (2015). Short-Term External Debt and Foreign Exchange Rate Volatility in Emerging Economies: Evidence from the Korea Market. Markets Finance and Trade, 21. doi: 10.1080/1540496X.2014.1013854

Identyfikatory

DOI

10.2478/fiqf-2020-0022