Joaquim Ferrão, José Dias Curto and Ana Paula Gama
The purpose of this paper is to provide new insights into the low-leverage phenomenon by analyzing the dynamics of firms’ financing policies. The authors explore three theoretical…
Abstract
Purpose
The purpose of this paper is to provide new insights into the low-leverage phenomenon by analyzing the dynamics of firms’ financing policies. The authors explore three theoretical explanations of firms’ motivations to switch among different levels of debt aversion: financial constraints, financial flexibility and financial distress.
Design/methodology/approach
The authors apply a multilevel mixed-effects model to a panel data sample of 9,005 US listed firms during 1987-2014. To use a multinomial ordered logit model, the authors break down the low-leverage firms into several levels of debt aversion.
Findings
The empirical analysis provides four main findings. First, there is a dynamic behavior regarding leverage policy: after five years, 39.4 per cent of initial zero debt firms remain all-equity firms, 14.2 per cent are leveraged firms and approximately 19.7 per cent still adopt a low-leverage policy. Second, greater asset volatility increases the expected likelihood that firms will be debt averse. Third, when firms grow bigger and older, they show a greater likelihood of moving toward a higher leverage level. Fourth, results derived from the investment variables of research and development, acquisitions, and capital expenditure provide strong evidence in favor of the financial flexibility hypothesis.
Practical implications
These findings suggest that conservative debt policy is integrated with corporate investment decisions.
Originality/value
This paper contributes to extant literature by emphasizing the dynamic process associated with a low-leverage policy, unlike prior studies that focus on the determinants and characteristics of low-leverage firms. It also applies an econometric methodology that is new to the field: multilevel models.
Details
Keywords
Isabel Costa Lourenço, Manuel Castelo Branco and José Dias Curto
The purpose of this paper is to examine some factors influencing the timeliness of corporate financial reporting in Portugal, highlighting the differences between publicly listed…
Abstract
Purpose
The purpose of this paper is to examine some factors influencing the timeliness of corporate financial reporting in Portugal, highlighting the differences between publicly listed family firms and nonfamily firms.
Design/methodology/approach
Regression analysis is used to analyse some factors which influence the timeliness of corporate financial reporting.
Findings
Findings indicate that Portuguese listed family firms are more likely to promptly report their annual financial statements, when compared to non-family firms.
Originality/value
Exploring a hitherto unexplored aspect of accounting quality in family firms, the timeliness of financial reporting.
Details
Keywords
Diana Simona Damian, José Dias Curto and José Castro Pinto
The purpose of this paper is to determine the impact of anchor stores on the performance and results of shopping centres and on the prices practiced by other stores. It analyses…
Abstract
Purpose
The purpose of this paper is to determine the impact of anchor stores on the performance and results of shopping centres and on the prices practiced by other stores. It analyses the customer spill‐over effect of the anchor stores on the Sonae Sierra shopping centres. Incorporated in Portugal in 1989, Sonae Sierra is an international corporation specializing in shopping centres. It is co‐owned by Sonae (Portugal) and Grosvenor (UK) who each own 50 per cent.
Design/methodology/approach
The data collection targeted 35 shopping centres in Portugal and Spain with 1,200,000 square feet (or more), for three consecutive years (2005‐2007). The anchor stores provide about 41 per cent of the total gross lettable area and on average pay only 18 per cent of the total rent collected by the developer. The ordinary least squares and Kruskal‐Wallis statistic (in order to avoid ANOVA assumption violations) are used to test the hypotheses.
Findings
The empirical analysis shows that a greater presence of anchors in a mall directly increases the sales, and consequently the rents of non‐anchor stores in a mall. The authors demonstrate that externalities are internalized by efficient allocation of space and incentives across stores, and also show that the anchor stores increased the malls' customer drawing power, measured as the number of people who visited the mall at a given time, although lately they have had less impact on the sales per person visiting the centres.
Research limitations/implications
This study is limited in that it surveyed only Sonae Sierra shopping centres, hence the results can only be generalized using this model as a basis. Other limitations were an inability to gather data on customer purchasing power in the areas surrounding the Sonae Sierra shopping centres, and the need to safeguard the confidentiality of the information, which did not allow the use of more independent variables for the models.
Practical implications
It is demonstrated that the total sales of the shopping malls are directly influenced by the number of anchors, and that the area allocated to them is a strategic tool.
Originality/value
The paper uses unique data consisting of mall store contracts to study the complex economic issues that arise when stores co‐occupy a large shopping centre.
Details
Keywords
Jonas da Silva Oliveira, Graça Maria do Carmo Azevedo and Maria José Pires Carvalho Silva
This study aims to explore the firm’s and country-level institutional forces that determine banks’ CSR reporting diversity, during the recent global financial crisis.
Abstract
Purpose
This study aims to explore the firm’s and country-level institutional forces that determine banks’ CSR reporting diversity, during the recent global financial crisis.
Design/methodology/approach
Specifically, this study assesses whether economic and institutional conditions explain CSR disclosure strategies used by 30 listed and unlisted banks from six countries in the context of the recent 2007/2008 global financial crisis. The annual reports and social responsibility reports of the largest banks in Canada, the UK, France, Italy, Spain and Portugal were content analyzed.
Findings
The findings suggest that economic factors do not influence CSR disclosure. Institutional factors associated with the legal environment, industry self-regulation and the organization’s commitments in maintaining a dialogue with relevant stakeholders are crucial elements in explaining CSR reporting. Consistent with the Dillard et al.’s (2004) model, CSR disclosure by banks not only stems from institutional legitimacy processes, but also from strategic ones.
Practical implications
The findings highlight the importance of CSR regulation to properly monitor manager’s’ opportunistic use of CSR information and regulate the assurance activities (regarding standards, their profession or even the scope of assurance) to guarantee the proper credibility reliability of CSR information.
Originality/value
The study makes two major contributions. First, it extends and modifies the model used by Chih et al. (2010). Second, drawn on the new institutional sociology, this study develops a theoretical framework that combines the multilevel model of the dynamic process of institutionalization, transposition and deinstitutionalization of organizational practices developed by Dillard et al. (2004) with Campbell’s (2007) theoretical framework of socially responsible behavior. This theoretical framework incorporates a more inclusive social context, aligned with a more comprehensive sociology-based institutional theory (Dillard et al., 2004; Campbell, 2007), which has never been used in the CSR reporting literature hitherto.