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The Modigliani–Miller theorem serves as the standard finance paradigm on corporate capital structure and managerial decision making. Implicitly, it is assumed that the market possesses full information about the firm. However, if firm managers have insider information, they may attempt to ‘signal’ changes in the firm’s financial structure and, in c...
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... In the present paper, we explore the deviation between Mafia companies and No Mafia ones by adopting a financial risk perspective. In so doing, we contribute to the macroarea of corporate risk (see Cao et al. 2015;Firth and Smith 1995;Koutmos et al. 2018, only to name a few). We contextualize Mafia and No Mafia companies in this field of studies; this might be helpful, to some extent, in explaining uncertainty in financial systems. ...
This paper presents a data-driven complex network approach, to show similarities and differences—in terms of financial risks—between the companies involved in organized crime businesses and those who are not. At this aim, we construct and explore two networks under the assumption that highly connected companies hold similar financial risk profiles of large entity. Companies risk profiles are captured by a statistically consistent overall risk indicator, which is obtained by suitably aggregating four financial risk ratios. The community structures of the networks are analyzed under a statistical perspective, by implementing a rank-size analysis and by investigating the features of their distributions through entropic comparisons. The theoretical model is empirically validated through a high quality dataset of Italian companies. Results highlights remarkable differences between the considered sets of companies, with a higher heterogeneity and a general higher risk profiles in companies traceable back to a crime organization environment.
Debt policy is one of the decisions that a firm should consider. Managers should set a sound debt policy, taking the right risks and ratios into consideration to ensure the growth of the firm. There are factors that need to be taken into consideration when determining debt policy. These are the asset structure of the firm, firm size and profitability. The aim of this study is to determine the impact of firm growth, asset structure, and profitability on debt policy. Financial statement data of 312 firms traded on the BIST between 2012 and 2021 were used. Panel data analysis was conducted as the methodology in the study. According to the findings of the analysis, firm growth has a positive and statistically significant impact on debt policy. However, other independent variables have no statistically significant impact on the dependent variable.
This study aims to contribute to the emergence of the literature focusing on exploring the factors influencing the financing decision, as well as examining the relationship between the firm size, profitability and firm growth towards the corporate debt. Questions such as how relevant firm size, profitability and firm growth to debt are, quantitatively, had not been fully answered in the business literature. The purpose of this study is to fill this large gap by examining the role of the firm size, profitability, investment and firm growth for the corporate debt. This study tries to examine the determinants of debt in the financial literature which include size, growth, business risk, and profitability in accordance with the capital structure theory, in manufacturing firms in Indonesia. The sample contained financial data from 150 firms for the period 2012–2017. The results showed that the manufacturing firms in Indonesia had high debt levels, especially the size, profitability, firm growth and profitability had proven to be the debt determinants, which also confirmed the Pecking Order Theory. This study also found that the management preference of manufacturing firms in Indonesia for risk was the risk-seeker or risk-neutral ones. This finding implies that the choice of funding sources originating from debt still provided greater returns compared to the capital cost needed due to business uncertainties.
