The heterogeneous effect of leverage on firm performance: a quantile regression analysis

Wafa Ghardallou
{"title":"The heterogeneous effect of leverage on firm performance: a quantile regression analysis","authors":"Wafa Ghardallou","doi":"10.1108/imefm-12-2021-0490","DOIUrl":null,"url":null,"abstract":"\nPurpose\nThe purpose of this study is to look at the effect of financial leverage on the performance of Saudi listed companies. It particularly proposes to examine the heterogeneity of this relationship depending on firm profitability and firm size.\n\n\nDesign/methodology/approach\nThe paper uses a sample of 120 nonfinancial companies listed on the Tadawul stock exchange during the period 2017–2020. Data is obtained from the companies’ financial reports. This study uses the system GMM and the quantile regression. The first methodology examines the effect of leverage decisions on firm performance, whereas the second one tests the heterogeneity of this relationship.\n\n\nFindings\nGMM results demonstrate the adverse effect of leverage on firm performance in terms of return on assets, return on equities and Tobin’s Q. Besides, quantile regression results show that this relationship is heterogeneous. Particularly, leverage seems to have a greater adverse effect on the performance of high-profitable firms than low-profitable firms. Moreover, leverage has a negative effect in larger firms, whereas the influence becomes negative in smaller ones.\n\n\nOriginality/value\nThis study is unique in that it approaches the capital structure issue from a different perspective, where the leverage decision is distinctly considered at various levels of firm profitability and firm size. In addition, the majority of the existing studies is carried out in developed countries. However, the results might not apply to emerging countries given the specificity of their institutional structure. In this regard, Saudi Arabia has a distinctive business climate characterized by the absence of corporate tax and an illiquid bond market.\n","PeriodicalId":47091,"journal":{"name":"International Journal of Islamic and Middle Eastern Finance and Management","volume":" ","pages":""},"PeriodicalIF":2.8000,"publicationDate":"2023-01-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Islamic and Middle Eastern Finance and Management","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1108/imefm-12-2021-0490","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 3

Abstract

Purpose The purpose of this study is to look at the effect of financial leverage on the performance of Saudi listed companies. It particularly proposes to examine the heterogeneity of this relationship depending on firm profitability and firm size. Design/methodology/approach The paper uses a sample of 120 nonfinancial companies listed on the Tadawul stock exchange during the period 2017–2020. Data is obtained from the companies’ financial reports. This study uses the system GMM and the quantile regression. The first methodology examines the effect of leverage decisions on firm performance, whereas the second one tests the heterogeneity of this relationship. Findings GMM results demonstrate the adverse effect of leverage on firm performance in terms of return on assets, return on equities and Tobin’s Q. Besides, quantile regression results show that this relationship is heterogeneous. Particularly, leverage seems to have a greater adverse effect on the performance of high-profitable firms than low-profitable firms. Moreover, leverage has a negative effect in larger firms, whereas the influence becomes negative in smaller ones. Originality/value This study is unique in that it approaches the capital structure issue from a different perspective, where the leverage decision is distinctly considered at various levels of firm profitability and firm size. In addition, the majority of the existing studies is carried out in developed countries. However, the results might not apply to emerging countries given the specificity of their institutional structure. In this regard, Saudi Arabia has a distinctive business climate characterized by the absence of corporate tax and an illiquid bond market.
查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
杠杆对企业绩效的异质性影响:分位数回归分析
本研究的目的是研究财务杠杆对沙特上市公司业绩的影响。它特别提出了根据企业盈利能力和企业规模来检验这种关系的异质性。设计/方法/方法本文使用了2017-2020年期间在Tadawul证券交易所上市的120家非金融公司的样本。数据来源于公司的财务报告。本研究采用系统GMM和分位数回归。第一种方法检验了杠杆决策对公司绩效的影响,而第二种方法检验了这种关系的异质性。sgmm结果在资产收益率、股票收益率和托宾q方面证明了杠杆对企业绩效的不利影响。此外,分位数回归结果表明,这种关系是异质性的。特别是,杠杆似乎对高利润公司的业绩比低利润公司有更大的不利影响。此外,杠杆在大公司中具有负面影响,而在小公司中则变为负面影响。原创性/价值本研究的独特之处在于,它从不同的角度探讨了资本结构问题,其中杠杆决策在公司盈利能力和公司规模的各个层面上都得到了明显的考虑。此外,现有的大多数研究都是在发达国家进行的。然而,鉴于新兴国家体制结构的特殊性,研究结果可能不适用于这些国家。在这方面,沙特阿拉伯拥有独特的商业环境,其特点是没有公司税,债券市场流动性差。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
CiteScore
5.40
自引率
10.00%
发文量
45
期刊介绍: The International Journal of Islamic and Middle Eastern Finance and Management (IMEFM) publishes quality and in-depth analysis on current issues within Islamic and Middle Eastern finance and management. The journal welcomes strong evidence-based empirical studies and results-focused case studies that share research in product development and clarify best practices. The title is also keen to consider work from emerging authors. IMEFM has just also accepted into Clarivate''s SSCI in 2018, and its IF will be available in summer 2019, with citations dating from 2016. The coverage includes but is not limited to: -Islamic finance: Fundamentals, trends and opportunities in Islamic Finance, Islamic banking and financial markets, Risk management, Corporate finance, Investment strategy, Islamic social finance, Financial planning, Housing finance, Legal and regulatory issues, -Islamic management: Corporate governance, Customer relationship management and service quality, Business ethics and corporate social responsibility, Management styles and strategies in Shariah environments, Labour and welfare economics, Political economy. The journal is the only title aiming to give an interdisciplinary and holistic view on Islamic finance and business management practices in order to inform these two intertwined communities.
期刊最新文献
Economic growth and sustainable development: evidence from OIC countries Economical rights versus God’s rights: criticising of the implementation Shariah economic in Indonesia Does diversity in top management and boards affect ESG performance? Evidence from Islamic and conventional banks in the MENA region The new legalities of Islamic contractual interpretation: institutional frameworks and the displacement of intention Exploring the stock market development and sustainable development nexus: insights from emerging market economies
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1