Relevance of Sectoral Clustering in Corporate Debt Policy

Version	Summary	Created by	Modification	Content Size	Created at	Operation
1		Katarina Valaskova	--	2771	2024-02-13 22:24:23	\|
2	layout	Camila Xu	Meta information modification	2771	2024-02-18 02:58:54	\|

This entry is adapted from the peer-reviewed paper 10.3390/admsci14020026

The processing and transformation of natural resources into completed and semi-finished products is the primary function of industry in each nation’s economy. There is no denying the significance of industry and sectoral classification of the economy, but the slow development and extension of one industry could have resulted in the advancement of other sectors that are now a part of contemporary communities.

financial performance indebtedness debt indicators sectoral analysis

1. Introduction

Firms in dynamically evolving market sectors attempt to react to competition or established customer requirements by reacting to new impulses and environmental effects. Currently, when the economies of different countries around the world are experiencing adverse developments, mostly due to the COVID-19 pandemic, the war in Ukraine, or the energy crisis, overcoming a difficult period of business management is crucial. Along with measuring corporate performance (e.g., in terms of sustainable growth rate—Bagh et al. 2023, of sustainable development—Crișan-Mitra et al. 2016; Crișan-Mitra et al. 2020, or of debt level—Gajdosikova et al. 2023), this process also includes assessing the achieved results from the point of view of financial health, evaluating the methods used to measure performance, and fulfilling long-term corporate objectives for the future (Valaskova and Nagy 2023). Using these methods and procedures, firms are able to obtain and subsequently evaluate data that reflect not only the dynamics of corporate development but also quantify the impact of the economic crisis on changes in the structure of financial indicators over the years and formulate proposals and recommendations for the future (Stratone 2023). The corporate financial situation is constantly influenced by many factors that must be identified for the firm to maintain its long-term development, particularly considering integrating cutting-edge technologies such as artificial-blockchain- and Internet of Things-based fintech (Andronie et al. 2023; Barbu et al. 2021; Lăzăroiu et al. 2023). The assessment of the financial situation of the enterprise helps in identifying problems and critical circumstances in time, thus preventing bankruptcy. If a firm aims to be successful in the market and compete in a rapidly changing environment, it should consider not only an adequate financial nation but also subsequent financial development (Zhang and Ding 2023). In general, a financially healthy company (Kliestik et al. 2020b) fulfills two requirements: (i) it is liquid over the long term (i.e., it can pay its obligations on time both now and in the future as long-term liquidity is significantly influenced by the ratio of equity and debt financing in the overall capital structure of the company (Santos et al. 2022)); and (ii) it is profitable (i.e., it can generate enough profit to cover its costs through its business activities (Ogunode et al. 2022)). The ratio between equity and debt, represented by the corporate financial structure (Lăzăroiu et al. 2020b; Nagy et al. 2023; Valaskova et al. 2023), is an issue that is frequently discussed in relation to financial analysis. Decisions regarding the development of the corporate capital structure are strategic ones, the consequences of which manifest over several years. Therefore, it is necessary to take several factors into account when developing it. Numerous studies have been conducted regarding the impact of particular determinants on a corporate capital structure (Brendea et al. 2022; Sardo et al. 2022; Zakaria and Salawa 2023). However, the industry in which the enterprise operates has an impact on the capital structure. Enterprises operating in the same sector have certain similar characteristics, such as the products they sell, how their production costs are structured, the technologies they employ (Valaskova et al. 2022; Nagy and Lazaroiu 2022), and their levels of profitability, while these tendencies are also manifested in the area of corporate capital structure. According to Ibrahim and Lau (2019), each industry has a distinct average total debt ratio. Since Schwartz and Aronson (1967) first outlined the relationship between industry affiliation and the capital structures of corporations in the United States, more than 50 years have passed. The industry determinant is nevertheless frequently taken into account in empirical capital structure research. From an economic standpoint, Slovakia stands as a compelling example of a nation that has undergone remarkable transformation and development. Nestled in the heart of Europe, the economy of Slovakia has evolved significantly since gaining independence in 1993. The country transitioned from a centrally planned economy to a market-oriented system, embracing reforms that propelled it into the European Union in 2004. One of the key drivers of the economic success of Slovakia has been its robust manufacturing sector, particularly automotive production. The presence of major international car manufacturers has not only contributed substantially to exports but has also spurred technological advancements and innovation within the country. Additionally, its strategic location and well-developed infrastructure have made it an attractive destination for foreign direct investment. Over the years, Slovakia has experienced steady economic growth, with GDP per capita gradually converging toward the European Union average. However, like many nations, it has faced challenges, including the need for continued economic diversification, addressing regional disparities, and adapting to global economic uncertainties. The economic landscape of Slovakia witnessed significant fluctuations and transformations from 2018 to 2021, reflecting a complex interplay of domestic and global factors. During this period, Slovakia navigated through challenges and opportunities that influenced its overall economic performance. As Slovakia continues to navigate the intricacies of the international economic landscape, its resilience and commitment to innovation position it as a noteworthy player in the European economic framework. Understanding the nuances of Slovakia’s economic journey provides valuable insights into the dynamics shaping its future growth and prosperity. Generally, the importance of one-country studies has arisen due to different changes in individual countries caused by divergent effects of the COVID-19 pandemic and other macroeconomic changes based on the industrial orientation of national economies.

2. The Relevance of Sectoral Clustering in Corporate Debt Policy

Firms have experienced certain changes over the past several decades as a result of the constantly changing circumstances in the market. This development was mainly caused by the advancement in science and research (Peng and Tao 2022), international integration (Onegina et al. 2022), and the growth in competitiveness (Marousek and Gavurova 2022; Adjei and Grega 2023; Privara 2022). For enterprises to maintain or improve their position in a specific business sector (Durana et al. 2022; Borowiecki et al. 2022), continuous evaluation and improvement regarding achieved business performance are necessary. The most important aspect is the corporate performance evaluation, which is used as the primary measure. The performance of the firm can be examined from the perspectives of marketing (Michulek et al. 2023; Michulek and Krizanova 2023), human resources (Zhang 2022), customer perspective (Kral and Janoskova 2023; Nahalkova Tesarova and Krizanova 2023), and management (Mazzucchelli et al. 2022). The financial performance analysis can provide the most detailed information about a specific corporate performance (Roy and Patro 2021; Galant and Cvek 2021), which occupies an invaluable position in the evaluation of the selected business entity (Oliver 2022).

The term performance is often used in everyday life in several areas, including sports and international finance (Kang and Kim 2023). Performance generally refers to how a particular investigated subject carries out an activity compared to the reference manner of completing the given activity. In the long term, however, in the current economic environment of the firm, it is not enough to rely on the currently achieved performance (Boulhaga et al. 2023), but it is necessary to focus on its continuous increase (Dana et al. 2021). Chen et al. (2023) characterize the measurement of corporate performance as a process whose key role is to support the development of the business into the future using the analysis and evaluation of established methods and procedures. Several definitions of performance agree on the success and achievement of established objectives. Performance can be broadly defined as a characteristic that helps in realizing the corporate future vision (Madaleno and Vieira 2020) through continuous measurement (Weqar et al. 2021) and comparison of past results with established criteria and predictions for the future (Barbuta-Misu and Madaleno 2020). The achieved results of individual financial analysis indicators (Li et al. 2021), industry statistics (Xu and Li 2019), or the effectiveness of the use of corporate production factors (Zhang and Aumeboonsuke 2022) are a few examples of these criteria in the area of the financial performance of enterprises. Business performance, which is additionally referred to as the operationalized level of business competitiveness, is the main subject of evaluation in several business studies, focusing on the success or productivity of corporate financial performance (Kristof and Virag 2022). Studies based on financial data and their analysis to ascertain the financial performance of the firm form the largest group of corporate performance evaluations. Through methods and techniques of financial analysis, financial performance describes the achieved corporate financial health (Durica et al. 2023; Kaczmarek et al. 2021). According to Hedija and Nemec (2021), Jin et al. (2022), and Kayani et al. (2023), data collected through financial performance evaluations have significant explanatory power. Many authors employ intricately constructed systems of indicators or constructed models that are separated into several parts to evaluate the performance of firms (e.g., in terms of labor productivity growth—Lăzăroiu and Rogalska 2023, of deliberate managerial strategy—Vătămănescu et al. 2020, and of organizational achievements—Vătămănescu et al. 2023) with the intention of introducing a more detailed comprehension of the achieved corporate performance.

Financial performance indicators generally focus on the data obtained from the profit and loss statement and balance sheet of the firm and are used to analyze not only revenues and expenses (Magni and Marchioni 2020) but also cash flow (Handoko et al. 2021). Financial indicators can be used to assess corporate activity (Zeynalli 2023), liquidity (Batrancea 2021), indebtedness (Guo and Zhao 2019), and overall performance (Stashchuk et al. 2021). Maximizing profit (Nyantakyi et al. 2023) and increasing the market value of the firm (Kluiters et al. 2023) are two fundamental objectives. In order to develop and make investments, a firm has to produce a profit (Jyoti and Khanna 2021). To monitor the achievement of this goal, return on equity (Wang et al. 2019) is often used, which is a crucial indicator of profitability because the investor needs to know the likely return on any investment made (Pham and Dao 2022) and return on sales, which is determined by operating profit as a percentage of sales. Goel (2021) states that a firm can be profitable but at the same time it can have cash flow problems. The ability of the firm to meet its short-term financial obligations is measured by liquidity indicators (Zhan et al. 2022). One of the best-known indicators of liquidity is current liquidity, which measures the ability of an enterprise to meet its short-term obligations due within one year with current assets that can be converted into cash (Vukovic et al. 2022). Although the monitoring of this financial indicator differs based on the sector in which the company operates, a value greater than 1 is recommended (Scalzer et al. 2019). The firm may have liquidity difficulties if this indicator displays a gradually decreasing trend or a lower value compared to the industry average. On the contrary, a high value of the ratio indicates that excess cash is not used efficiently (Farahani et al. 2020). It is the liquidity of the company that is a prerequisite for its financial stability (Casu et al. 2019), while, if it is disturbed, it is possible to point to the insolvency of the firm (Pulawska 2021), which is closely related to the indebtedness (Olujobi 2021). The use of borrowed funds by a firm for financing its business activities and assets is known as corporate indebtedness (Baines and Hager 2021). A high debt ratio indicates that the business relies heavily on debt to finance its long-term needs (Ahmed and Afza 2019). Many companies choose debt financing since they are unable to finance themselves entirely with their own resources in the present economic situation. Indicators of indebtedness reveal how extensively foreign resources are used (Benlemlih and Cai 2020), help in an in-depth evaluation (Jacobs et al. 2020), and analyze and plan adjustments to corporate financing sources (Amare 2021). Even though there are numerous indicators of indebtedness, total indebtedness is regarded as a complex indicator that captures the structure of financial resources (Jencova et al. 2021). Due to the wide variations among sectors, there is no set recommendation for what proportion of the requirements of a business should be financed by debt. When a company uses debt financing, its earnings and shareholder returns (Kliestik et al. 2020a; Santos-Jaén et al. 2023) might increase. Since the interest on the debt must be repaid even if the company does not make a profit, this type of financing represents a higher risk for the firm (Hudakova et al. 2023). Financial decision making requires particular attention to the optimal capital structure setting since it is a relatively complicated issue (Cerkovskis et al. 2022). The ratio of equity to debt funding is largely influenced by the sector in which the firm works (Kucera et al. 2021), the structure of the assets of the company (Srhoj 2022), and the interest rate charged by banks (Liao 2020). The profitability of equity capital is frequently increased by employing debt as long as the interest rate is less than the profit of the enterprise itself (Jedrzejczak-Gas 2013). Financial leverage may be categorized as debt-related actions. The more debt the firm generates, the higher the financial leverage indicator (Iqbal et al. 2022). The financial leverage indicator is predicated on the idea that using debt to finance corporate operations increases the relative profitability of equity (Toemoeri et al. 2021) and also assumes that debt financing is less expensive than equity financing (Hong et al. 2021). At the same time, however, the use of foreign capital also increases the riskiness of the firm (Kljucnikov et al. 2022).

Numerous determinants, such as prioritizing the financing of business operations basically through debt, have an impact on corporate indebtedness and affect the composition of corporate capital in different ways (Gajdosikova et al. 2023). The size of the firm greatly influences the level of corporate debt. As evidenced by their lower level of debt, smaller enterprises have a lower percentage of foreign resources than larger ones (Rahim et al. 2019). The legal form of the company is frequently mentioned (e.g., Dvoulety and Blazkova 2021; Allaya et al. 2022) as a significant factor affecting the choice of financing form. Even Farhangdoust et al. (2020) points out significant differences in the indebtedness of firms as a result of the impact of their selected legal form. Corporate indebtedness is significantly influenced by the level and volatility of corporate profits (Fischer and Jensen 2019; Kliestik et al. 2022), the costs of financial difficulties (Alvarez-Botas and Gonzalez 2021), the impact of inflation (Jaworski and Czerwonka 2021), the effort to maintain ownership control of the firm (Martins et al. 2020), dividend policy (Sierpinska 2022), requirements for the financial flexibility of the firm (Jameson et al. 2021), and the method and intensity of taxation (Sobiech et al. 2021), while earnings management may also have implications for corporate debt (Valaskova and Gajdosikova 2022). According to Ramelli and Wagner (2020), the market situation has significant consequences for the financial decision making of the business entity. The affiliation of the firm to the industry is another factor that Chen et al. (2022) identify as influencing the level of corporate indebtedness. Industry classification has a significant impact on the average corporate debt level ratio (Harris and Raviv 1991). Furthermore, Bradley et al. (1984) reveal that industry is a significant determinant of leverage and that there is greater diversity across sectors than within industries in corporate leverage ratios. The result indicates the consistency within an industry and the variability between industries. According to Gaud et al. (2005), small- and medium-sized enterprises are impacted by the industry in which they operate. Generally, small- and medium-sized enterprises within a particular sector additionally face identical present circumstances and frequently implement a similar financing pattern. Furthermore, Hall et al. (2004) presented evidence that agency costs may fluctuate throughout firms and provided inter-industry differences in the debt of these enterprises. According to La Rocca et al. (2011), industry-specific characteristics have an impact on the debt ratio by affecting the significance of business risk, tangible assets, and growth opportunities. Therefore, industry-specific variables may influence the capital structure of small- and medium-sized enterprises. Most research papers on the factors that determine the capital structure of a firm have investigated the impact of the industry using dummy variables or median industry variables (e.g., De Jong et al. 2008; Degryse et al. 2012). Nowadays, the impact of industry on corporate capital structure has been examined by many authors. Kayo and Kimura (2011) and Smith et al. (2015) used the three industry-specific determinants. La Rocca et al. (2011) concluded that firms in a developing sector frequently require additional external financing to cover their investment potential since internal financing may not be sufficient to cover all future opportunities. Danso et al. (2021) suggested that the characteristics of the firms and the nations where their shares are listed determine a significant amount of the predictive power of industry affiliation on firm capital structure. However, industry continues to contribute significantly to the difference in capital structure ratios, even after considering both firm and country impacts.

References

Bagh, Tanveer, Mirza Muhammad Naseer, Muhammad Asif Khan, Paula Pypłacz, and Judit Oláh. 2023. Sustainable growth rate, corporate value of US firms within capital and labor market distortions: The moderating effect of institutional quality. Oeconomia Copernicana 14: 1211–55.
Crișan-Mitra, Cătălina Silvia, Vasile Dinu, Catalin Postelnicu, and Dan-Cristian Dabija. 2016. Corporate Practice of Sustainable Development on an Emerging Market. Transformations in Business & Economics 15: 228–43.
Crișan-Mitra, Cătălina Silvia, Liana Stanca, and Dan-Cristian Dabija. 2020. Corporate social performance: An assessment model on an emerging market. Sustainability 12: 4077.
Gajdosikova, Dominika, George Lăzăroiu, and Katarina Valaskova. 2023. How Particular Firm-Specific Features Influence Corporate Debt Level: A Case Study of Slovak Enterprises. Axioms 12: 183.
Valaskova, Katarina, and Marek Nagy. 2023. Macro-economic development of the EU countries in the context of performance and competitiveness of SMEs. Business, Management and Economics Engineering 21: 124–39.
Stratone, Madalina-Elena. 2023. Mapping the impact of the intellectual capital on the agility and performance of an organization: A bibliometric study. Ekonomicko-Manazerske Spektrum 17: 39–53.
Andronie, Mihai, Mariana Iatagan, Cristian Uță, Iulian Hurloiu, Adrian Dijmărescu, and Irina Dijmărescu. 2023. Big data management algorithms in artificial Internet of Things-based fintech. Oeconomia Copernicana 14: 769–93.
Barbu, Cătălin Mihail, Dorian Laurenţiu Florea, Dan-Cristian Dabija, and Mihai Constantin Răzvan Barbu. 2021. Customer experience in fintech. Journal of Theoretical and Applied Electronic Commerce Research 16: 1415–33.
Lăzăroiu, George, Mădălina Bogdan, Marinela Geamănu, Lăcrămioara Hurloiu, Luminița Ionescu, and Roxana Ștefănescu. 2023. Artificial intelligence algorithms and cloud computing technologies in blockchain-based fintech management. Oeconomia Copernicana 14: 707–30.
Zhang, Zhibin, and Youqiang Ding. 2023. The impact of green financial development on stock price crash risk from the perspective of information asymmetry in Chinese listed companies. Environmental Science and Pollution Research 30: 87199–214.
Kliestik, Tomas, Katarina Valaskova, George Lăzăroiu, Maria Kovacova, and Jaromir Vrbka. 2020b. Remaining Financially Healthy and Competitive: The Role of Financial Predictors. Journal of Competitiveness 12: 74–92.
Santos, Eleonora, Ines Lisboa, and Teresa Eugenio. 2022. The financial performance of family versus non-family firms operating in nautical tourism. Sustainability 14: 1693.
Ogunode, Olubunmi Adewole, Olaolu Ayodeji Awoniyi, and Ayodeji Temitope Ajibade. 2022. Capital adequacy and corporate performance of non-financial firms: Empirical evidence from Nigeria. Cogent Business & Management 9: 2156089.
Lăzăroiu, George, Luminița Ionescu, Mihai Andronie, and Irina Dijmărescu. 2020b. Sustainability Management and Performance in the Urban Corporate Economy: A Systematic Literature Review. Sustainability 12: 7705.
Nagy, Marek, George Lăzăroiu, and Katarina Valaskova. 2023. Machine Intelligence and Autonomous Robotic Technologies in the Corporate Context of SMEs: Deep Learning and Virtual Simulation Algorithms, Cyber-Physical Production Networks, and Industry 4.0-Based Manufacturing Systems. Applied Sciences 13: 1681.
Valaskova, Katarina, Dominika Gajdosikova, and George Lăzăroiu. 2023. Has the COVID-19 pandemic affected the corporate financial performance? A case study of Slovak enterprises. Equilibrium. Quarterly Journal of Economics and Economic Policy 18: 1133–78.
Brendea, Gabriela, Fanuta Pop, and Loredana Mihalca. 2022. Capital structure and firm performance: The case of Central and Eastern European economies. Ekonomicky Casopis 70: 430–49.
Sardo, Filipe, Zelia Serrasqueiro, Elisabete Vieira, and Manuel Rocha Armada. 2022. Is financial distress risk important for manufacturing SMEs to rebalance the short-term debt ratio? Journal of Risk Finance 23: 516–34.
Zakaria, Firano, and Doughmi Salawa. 2023. Hierarchical financing and reality of the financial structure of Moroccan listed companies. Journal of Modelling in Management 18: 1277–90.
Valaskova, Katarina, Dominika Gajdosikova, and Tomislava Pavic Kramaric. 2022. How important is the business environment for the performance of enterprises? Case study of selected European countries. Central European Business Review 11: 85–110.
Nagy, Marek, and George Lazaroiu. 2022. Computer vision algorithms, remote sensing data fusion techniques, and mapping and navigation tools in the Industry 4.0-based Slovak automotive sector. Mathematics 10: 3543.
Ibrahim, Husaini, and Teik-Cheng Lau. 2019. The determinants of financial leverage for surviving listed companies in Malaysia. International Journal of Business and Society 20: 75–94.
Schwartz, Eli, and J. Richard Aronson. 1967. Some surrogate evidence in support of the concept of optimal financial structure. Journal of Finance 22: 10–18.
Peng, Yongzhang, and Changqi Tao. 2022. Can digital transformation promote enterprise performance?—From the perspective of public policy and innovation. Journal of Innovation & Knowledge 7: 100198.
Onegina, Viktoriya, Vitalina Alekseevna Babenko, Yuliia Kravchenko, Yurii Vitkovskyi, and Olga Anisimova. 2022. Management of Product quality and competitiveness of agricultural enterprises in the context of international integration. International Journal of Information Technology Project Management 13: 1–14.
Marousek, Josef, and Beata Gavurova. 2022. Recovering phosphorous from biogas fermentation residues indicates promising economic results. Chemosphere 291: 133008.
Adjei, Raymond Kofi, and Libor Grega. 2023. Economic growth effects of de facto and de jure trade globalization in ECOWAS. Journal of Competitiveness 15: 18–35.
Privara, Andrej. 2022. Economic growth and labour market in the European Union: Lessons from COVID-19. Oeconomia Copernicana 13: 355–77.
Durana, Pavol, Roman Blazek, Veronika Machova, and Miroslav Krasnan. 2022. The use of Beneish M-scores to reveal creative accounting: Evidence from Slovakia. Equilibrium. Quarterly Journal of Economics and Economic Policy 17: 481–510.
Borowiecki, Ryszard, Barbara Siuta-Tokarska, Mateusz Janas, Sylwia Kruk, Pawel Krzeminski, Agnieszka Thier, and Katarzyna Zmija. 2022. The Competitive Position of Small Business Furniture Industry Enterprises in Poland in the Context of Sustainable Management: Relationships, Interdependencies, and Effects of Activities. Sustainability 14: 9368.
Michulek, Jakub, Lubica Gajanova, Anna Krizanova, and Margareta Nadanyiova. 2023. Determinants of improving the relationship between corporate culture and work performance: Illusion or reality of serial mediation of leadership and work engagement in a crisis period? Frontiers in Psychology 14: 1135199.
Michulek, Jakub, and Anna Krizanova. 2023. Is there an impact of company size and industry on corporate culture? An empirical study from the Slovak Republic. Management Dynamics in the Knowledge Economy 11: 1–15.
Zhang, Bin. 2022. Visualization of the Digital Enterprise Performance Management System Integrating the Simulated Annealing Algorithm. Mathematical Problems in Engineering 2022: 5936334.
Kral, Pavol, and Katarina Janoskova. 2023. Interdependence of selected socio-demographic characteristics of consumers and consumer preferences toward brands. Innovative Marketing 19: 197–207.
Nahalkova Tesarova, Eva, and Anna Krizanova. 2023. How shopping was transformed from offline to online space—A case study within the Slovak Republic. Management Dynamics in the Knowledge Economy 11: 128–37.
Mazzucchelli, Alice, Roberto Chierici, Manlio Del Giudice, and Ilena Bua. 2022. Do circular economy practices affect corporate performance? Evidence from Italian large-sized manufacturing firms. Corporate Social Responsibility and Environmental Management 29: 2016–29.
Roy, Priyanka, and Binoti Patro. 2021. Financial performance analysis of NBFC-MFIs in India using TOPSIS and IV-TOPSIS. International Journal of Mathematical, Engineering and Management Sciences 6: 1423–38.
Galant, Adriana, and Dajana Cvek. 2021. The effect of environmental performance investments on financial performance: Analysis of Croatian companies. Central European Business Review 10: 37–51.
Oliver, John. 2022. Chronic corporate performance in media-tech firms: A new perspective. Journal of Media Business Studies 19: 263–83.
Kang, Che-Yung, and Min-Ho Kim. 2023. Born Global Strategies and the Corporate Performance of Korean Firms. Journal of Korea Trade 27: 159–75.
Boulhaga, Monia, Abdelfettah Bouri, Ahmed Elamer, and Bassam Ibrahim. 2023. Environmental, social and governance ratings and firm performance: The moderating role of internal control quality. Corporate Social Responsibility and Environmental Management 30: 134–45.
Dana, Leo Paul, Mohammad Mahdi Rounaghi, and Gholamreza Enayati. 2021. Increasing productivity and sustainability of corporate performance by using management control systems and intellectual capital accounting approach. Green Finance 3: 1–14.
Chen, Suijun, Pankaewta Lakkanawanit, Muttanachai Suttipun, and He Xue. 2023. Environmental regulation and corporate performance: The effects of green financial management and top management’s environmental awareness. Cogent Business & Management 10: 2209973.
Madaleno, Mara, and Elisabete Vieira. 2020. Corporate performance and sustainability: Evidence from listed firms in Portugal and Spain. Energy Reports 6: 141–47.
Weqar, Faizi, Ahmed Musa Khan, Mohd. Anas Raushan, and Imamul Haque. 2021. Measuring the impact of intellectual capital on the financial performance of the finance sector of India. Journal of the Knowledge Economy 12: 1134–51.
Barbuta-Misu, Nicoleta, and Mara Madaleno. 2020. Assessment of bankruptcy risk of large companies: European countries evolution analysis. Journal of Risk and Financial Management 13: 58.
Li, Zhyyong, Jonathan Crook, Galina Andreeva, and Ying Tang. 2021. Predicting the risk of financial distress using corporate governance measures. Pacific-Basin Finance Journal 68: 101334.
Xu, Jian, and Jingsuo Li. 2019. The impact of intellectual capital on SMEs’ performance in China: Empirical evidence from non-high-tech vs. high-tech SMEs. Journal of Intellectual Capital 20: 488–509.
Zhang, Hui, and Vesarach Aumeboonsuke. 2022. Technological innovation, risk-taking and firm performance—Empirical evidence from Chinese listed companies. Sustainability 14: 14688.
Kristof, Tamas, and Miklos Virag. 2022. What drives financial competitiveness of industrial sectors in Visegrad Four countries? Evidence by use of machine learning techniques. Journal of Competitiveness 14: 117–36.
Durica, Marek, Jaroslav Frnda, and Lucia Svabova. 2023. Artificial neural network and decision tree-based modelling of non-prosperity of companies. Equilibrium. Quarterly Journal of Economics and Economic Policy 18: 1105–31.
Kaczmarek, Jaroslaw, Sergio Luis Nanez Alonso, Andrzej Sokolowski, Kamil Fijorek, and Sabina Denkowska. 2021. Financial threat profiles of industrial enterprises in Poland. Oeconomia Copernicana 12: 463–98.
Hedija, Veronika, and Danike Nemec. 2021. Gender diversity in leadership and firm performance: Evidence from the Czech Republic. Journal of Business Economics and Management 22: 156–80.
Jin, Ling, Jun Hyeok Choi, Saerona Kim, and Kwanghee Cho. 2022. Slack resources, corporate performance, and COVID-19 pandemic: Evidence from China. International Journal of Environmental Research and Public Health 19: 14354.
Kayani, Umar Nawaz, Christopher Gan, Mustafa Raza Rabbani, and Yousra Trichilli. 2023. Is short-term firm performance an indicator of a sustainable financial performance? Empirical evidence. Studies in Economics and Finance. early access.
Lăzăroiu, George, and Elżbieta Rogalska. 2023. How generative artificial intelligence technologies shape partial job displacement and labor productivity growth. Oeconomia Copernicana 14: 703–6.
Vătămănescu, Elena-Mădălina, Vlad-Andrei Alexandru, Andreea Mitan, and Dan-Cristian Dabija. 2020. From the Deliberate Managerial Strategy towards International Business Performance: A Psychic Distance vs. Global Mindset Approach. Systems Research and Behavioral Science 37: 374–87.
Vătămănescu, Elena-Mădălina, Constantin Brătianu, Dan-Cristian Dabija, and Simona Popa. 2023. Capitalizing Online Knowledge Networks: From Individual Knowledge Acquisition towards Organizational Achievements. Journal of Knowledge Management 27: 1366–89.
Magni, Carlo Alberto, and Andrea Marchioni. 2020. Average rates of return, working capital, and NPV-consistency in project appraisal: A sensitivity analysis approach. International Journal of Production Economics 229: 107769.
Handoko, Jesica, Made Narsa, and Basuki Basuki. 2021. Role difference and negativity bias relevance in strategy review: An experiment. Cogent Business & Management 8: 1938928.
Zeynalli, Elay. 2023. Innovative methodology in financial analysis of insurance organizations. Academy Review 58: 77–95.
Batrancea, Larissa. 2021. The influence of liquidity and solvency on performance within the healthcare industry: Evidence from publicly listed companies. Mathematics 9: 2231.
Guo, Jianhao, and Chunkai Zhao. 2019. Impacting factors of the Chinese military enterprises’ capital structure and approaches of importing private capital. Defence and Peace Economics 30: 858–76.
Stashchuk, Olena, Tetiana Shmatkovska, Mykola Dziamulych, Myroslava Kupyra, Nataliya Vahnovska, and Petro Kosinskyi. 2021. Model for efficiency evaluation of financial security management of joint stock companies operating in the agricultural sector: A case study of Ukraine. Scientific Papers-Series Management, Economic Engineering in Agriculture and Rural Development 21: 715–28.
Nyantakyi, George, Francis Atta Sarpong, Philip Adu Sarfo, Nneka Uchenwoke Ogochukwu, and Winnifred Coleman. 2023. A boost for performance or a sense of corporate social responsibility? A bibliometric analysis on sustainability reporting and firm performance research (2000–2022). Cogent Business & Management 10: 2220513.
Kluiters, Leon, Mohit Srivastava, and Ladislav Tyll. 2023. The impact of digital trust on firm value and governance: An empirical investigation of US firms. Society and Business Review 18: 71–103.
Jyoti, Gaurav, and Ashu Khanna. 2021. Does sustainability performance impact financial performance? Evidence from Indian service sector firms. Sustainable Development 29: 1086–95.
Wang, Keling, Yaqiong Miao, Ching-Hui Su, Ming-Hsiang Chen, Zhongjun Wu, and Tie Wang. 2019. Does corporate charitable giving help sustain corporate performance in China? Sustainability 11: 1491.
Pham, Phuong My Thai, and Binh Thanh Thi Dao. 2022. A meta-analysis of risk taking and corporate performance. Cogent Business & Management 9: 2064263.
Goel, Puneeta. 2021. Rising standards of sustainability reporting in India: A study of impact of reforms in disclosure norms on corporate performance. Journal of Indian Business Research 13: 92–109.
Zhan, Xintong, Bing Han, Jie Cao, and Qing Tong. 2022. Option return predictability. Review of Financial Studies 35: 1394–442.
Vukovic, Bojana, Suncica Milutinovic, Kristina Mijic, Branko Krsmanovic, and Dejan Jaksic. 2022. Analysis of financial performance determinants: Evidence from the European agricultural companies. Custos e Agronegocio 18: 285–306.
Scalzer, Rodrigo, Adriano Rodrigues, Marcelo Alvaro Macedo, and Peter Wanke. 2019. Financial distress in electricity distributors from the perspective of Brazilian regulation. Energy Policy 125: 250–59.
Farahani, Abolfazl, Holger Wallbaum, and Jan-Olof Dalenbäck. 2020. Cost-optimal maintenance and renovation planning in multifamily buildings with annual budget constraints. Journal of Construction Engineering and Management 146: 04020009.
Casu, Barbara, Filippo Di Pietro, and Antonio Trujillo-Ponce. 2019. Liquidity creation and bank capital. Journal of Financial Services Research 56: 307–40.
Pulawska, Karolina. 2021. Financial stability of European insurance companies during the COVID-19 pandemic. Journal of Risk and Financial Management 14: 266.
Olujobi, Olusola Joshua. 2021. Combating insolvency and business recovery problems in the oil industry: Proposal for improvement in Nigeria’s insolvency and bankruptcy legal framework. Heliyon 7: e06123.
Baines, Joseph, and Sandy Brian Hager. 2021. The great debt divergence and its implications for the Covid-19 crisis: Mapping corporate leverage as power. New Political Economy 26: 885–901.
Ahmed, Naveed, and Talat Afza. 2019. Capital structure, competitive intensity and firm performance: Evidence from Pakistan. Journal of Advances in Management Research 16: 796–813.
Benlemlih, Mohammed, and Li Cai. 2020. Corporate environmental performance and financing decisions. Business Ethics: A European Review 29: 248–65.
Jacobs, Jan, Kazuo Ogawa, Elmer Sterken, and Ichiro Tokutsu. 2020. Public debt, economic growth and the real interest rate: A panel VAR Approach to EU and OECD countries. Applied Economics 52: 1377–94.
Amare, Ayalew. 2021. Capital structure and profitability: Panel data evidence of private banks in Ethiopia. Cogent Economics & Finance 9: 1953736.
Jencova, Silvia, Ivan Petruska, and Marta Lukacova. 2021. Relationship between ROA and total indebtedness by threshold regression model. Montenegrin Journal of Economics 17: 37–46.
Kliestik, Tomas, Katarina Valaskova, Elvira Nica, Mária Kovacova, and George Lăzăroiu. 2020a. Advanced methods of earnings management: Monotonic trends and change-points under spotlight in the Visegrad countries. Oeconomia Copernicana 11: 371–400.
Santos-Jaén, Jose Manuel, Gema Martín de Almagro Vázquez, and María del Carmen Valls Martínez. 2023. Is earnings management impacted by audit fees and auditor tenure? An analysis of the Big Four audit firms in the US market. Oeconomia Copernicana 14: 899–934.
Hudakova, Maria, Peter Kardos, Jan Dvorsky, Charles Randy Afful, and Jitka Kloudova. 2023. Management of Operational Risk in the Context of Financial Performance of SMEs. Systems 11: 408.
Cerkovskis, Edgars, Dominika Gajdosikova, and Cristian Florin Ciurlau. 2022. Capital structure theories: Review of literature. Ekonomicko-Manazerske Spektrum 16: 12–24.
Kucera, Jiri, Marek Vochozka, and Zuzana Rowland. 2021. The ideal debt ratio of an agricultural enterprise. Sustainability 13: 4613.
Srhoj, Stjepan. 2022. Can we predict high growth firms with the financial ratios? Financial Internet Quarterly 18: 66–73.
Liao, Gordon. 2020. Credit migration and covered interest rate parity. Journal of Financial Economics 138: 504–25.
Jedrzejczak-Gas, Janina. 2013. Factors determining the profitability of equity in small and medium-sized enterprises in Poland. Management-Poland 17: 185–98.
Iqbal, Najaf, Ju Feng Xu, Zeeshan Fareed, Guangcai Wan, and Lina Ma. 2022. Financial leverage and corporate innovation in Chinese public-listed firms. European Journal of Innovation Management 25: 299–323.
Toemoeri, Gergo, Vilmos Lakatos, and Bernadett Beresne Martha. 2021. The effect of financial risk taking on profitability in the pharmaceutical industry. Economies 9: 153.
Hong, Min, Zhenghiu Li, and Benjamin Drakeford. 2021. Do the green credit guidelines affect corporate green technology innovation? Empirical research from China. International Journal of Environmental Research and Public Health 18: 1682.
Kljucnikov, Alexandr, Mehmet Civelek, Cyril Klimes, and Radim Farana. 2022. Export risk perceptions of SMEs in selected Visegrad countries. Equilibrium. Quarterly Journal of Economics and Economic Policy 17: 173–90.
Rahim, Rida, Cynthia Afriani Utama, and Rofkoh Rokhim. 2019. Does Religion Affect Capital Structure in Indonesia? Pertanika Journal of Social Sciences & Humanities 27: 131–51.
Dvoulety, Ondrej, and Ivana Blazkova. 2021. Exploring firm-level and sectoral variation in total factor productivity (TFP). International Journal of Entrepreneurial Behavior & Research 27: 1526–47.
Allaya, Manel, Imen Derouiche, and Anke Muessig. 2022. Voluntary disclosure, ownership structure, and corporate debt maturity: A study of French listed firms. International Review of Financial Analysis 81: 101300.
Farhangdoust, Shayan, Mahdi Salehi, and Homa Molavi. 2020. Management stock ownership and corporate debt: Evidence from an emerging market. Management Research Review 43: 1221–39.
Fischer, Marcel, and Bjarne Astrup Jensen. 2019. The debt tax shield in general equilibrium. Journal of Banking & Finance 100: 151–66.
Kliestik, Tomas, Alena Novak Sedlackova, Martin Bugaj, and Andrej Novak. 2022. Stability of profits and earnings management in the transport sector of Visegrad countries. Oeconomia Copernicana 13: 475–509.
Alvarez-Botas, Celia, and Vicotr Gonzalez. 2021. Institutions, banking structure and the cost of debt: New international evidence. Accounting & Finance 61: 265–303.
Jaworski, Jacek, and Leszek Czerwonka. 2021. Determinants of enterprises’ capital structure in energy industry: Evidence from European Union. Energies 14: 1871.
Martins, Henrique Castro, Eduardo Schiehll, and Paulo Renato Soares Terra. 2020. Do shareholder protection and creditor rights have distinct effects on the association between debt maturity and ownership structure? Journal of Business Finance & Accounting 47: 708–29.
Sierpinska, Maria. 2022. Dividend policy of listed energy companies in Poland. Inzynieria Mineralna-Journal of The Polish Mineral Engineering Society 49: 35–41.
Jameson, Melvin, Tao-Hsien Dolly King, and Andrew Prevost. 2021. Top management incentives and financial flexibility: The case of make-whole call provisions. Journal of Business Finance & Accounting 48: 374–404.
Sobiech, Anna, Dimitris Chronopoulos, and John Wilson. 2021. The real effects of bank taxation: Evidence for corporate financing and investment. Journal of Corporate Finance 69: 101989.
Valaskova, Katarina, and Dominika Gajdosikova. 2022. Corporate debt and earnings management: Evidence from Slovakia. Paper presented at 12th International Scientific Conference Business and Management, Vilnius, Lithuania, May 12–13; 2022, pp. 414–21.
Ramelli, Stefano, and Alexander Wagner. 2020. Feverish stock price reactions to COVID-19. Review of Corporate Finance Studies 9: 622–55.
Chen, Zhongfei, Mingmei Yin, and Mengling Zhou. 2022. Does environmental regulatory pressure affect corporate debt financing? Resources, Conservation and Recycling 184: 106405.
Harris, Milton, and Artur Raviv. 1991. The theory of capital structure. Journal of Finance 46: 297–355.
Bradley, Michael, Gregg Jarrell, and E. Han Kim. 1984. On the existence of an optimal capital structure: Theory and evidence. Journal of Finance 39: 857–78.
Gaud, Phillipe, Elion Jani, Martin Hoesli, and Andre Bender. 2005. The capital structure of Swiss companies: An empirical analysis using dynamic panel data. European Financial Management 11: 51–69.
Hall, Graham, Patrick Hutchinson, and Nicos Michaelas. 2004. Determinants of the capital structures of European SMEs. Journal of Business Finance & Accounting 31: 711–28.
La Rocca, Maurizio, Tiziana La Rocca, and Alfio Cariola. 2011. Capital structure decisions during a firm’s life cycle. Small Business Economics 37: 107–30.
De Jong, Abe, Rezaul Kabir, and Thuy Thu Nguyen. 2008. Capital structure around the world: The roles of firm-and country-specific determinants. Journal of Banking & Finance 32: 1954–69.
Degryse, Hans, Peter de Goeij, and Peter Kappert. 2012. The impact of firm and industry characteristics on small firms’ capital structure. Small Business Economics 38: 431–47.
Kayo, Eduardo, and Herbert Kimura. 2011. Hierarchical determinants of capital structure. Journal of Banking & Finance 35: 358–71.
Smith, David, Jianguo Chen, and Hamish Anderson. 2015. The influence of firm financial position and industry characteristics on capital structure adjustment. Accounting & Finance 55: 1135–69.
Danso, Albert, Samuel Fosu, Samuel Owusu-Agyei, Collins Ntim, and Emmanuel Adegbite. 2021. Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure? International Journal of Finance & Economics 26: 5073–92.

© Text is available under the terms and conditions of the Creative Commons Attribution (CC BY) license; additional terms may apply. By using this site, you agree to the Terms and Conditions and Privacy Policy.

Upload a video for this entry

Information

Subjects: Business, Finance

Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :

Dominika Gajdosikova

Katarina Valaskova

George Lazaroiu

View Times: 80

Update Date: 18 Feb 2024

Table of Contents

Video Upload Options

Confirm

1. Introduction

2. The Relevance of Sectoral Clustering in Corporate Debt Policy

References