The effect of the Structure of Sources Financing on Operating Performance with an Emphasis on the Role of Strategic Ownership and Financial Restatements of Corporate Admitted to the Tehran Stock Exchange
Subject Areas : Stock Exchange
Hossein Eslami Mofid Abadi
1
,
Soniya Maraghe
2
,
Marzieh Ebrahimi Shaghaghi
3
1 - Department of Accounting and Management, Shahryar Branch, Islamic Azad University, Shahryar, Iran
2 - Masters Student in Financial Management, Department of Accounting and Management, Shahryar Branch, Islamic Azad University, Shahryar, Iran
3 - Department of Accounting and Management, Shahryar Branch, Islamic Azad University, Shahriar, Iran
Keywords: operational performance, Capital Structure, statements of financial statements, strategic finance,
Abstract :
This research was conducted with the aim of investigating the effect of the structure of financing sources on operational performance with a focus on the role of strategic ownership and re-presentation of financial statements of companies admitted to the Tehran Stock Exchange. The research method was descriptive-survey, the time period studied was from 2013 to 2018 and the statistical sample of the research included 171 companies. The data and information of the research has been collected through library sources and referring to the financial statements of the companies admitted to the Tehran Stock Exchange in the form of (field). Multivariate regression and statistical tests (Durbin-Watson (D-W) test, Kolmogorov-Smirnov, Dickey-Fuller (DF), Augmented Dickey-Fuller (ADF), Phillips-Perron (PP), and LM-ARCH) using EViews software version 9. Finally, to determine the significance of the linear regression equation, the Fisher test (F-test) and for the significance of the coefficients, the T-student (T-test) were employed. Therefore, the findings of this research show that due to the role of strategic ownership and re-presentation of financial statements, the structure of financing sources has a significant effect on the operational performance of companies accepted in Tehran Stock Exchange.
_|1) Aslan, H., & Kumar, P. (2012). Strategic Ownership Structure and the Cost of Debt. The Review of Financial Studies, 25(7), 2257–2299.
2) Balakrishnan, K., Shivakumar, L., & Taori, P. (2021). Analysts’ estimates of the cost of equity capital. Journal of Accounting and Economics, 71(2-3), 101367.
3) Ball, R., Bushman, R. M., & Vasvari, F. P. (2008). The debt-contracting value of accounting information and loan syndicate structure. Journal of Accounting Research, 46, 247–287.
4) Bartov, E., Givoly, D., & Hayn, C. (2002). The rewards to meeting or beating earnings expectations. Journal of Accounting and Economics, 33, 173–204
5) Belghitar, Y., Clark, E., & Kassimatis, K. (2011). The prudential effect of strategic institutional ownership on stock performance. International Review of Financial Analysis, 20(4), 191–199.
6) Bharath, S. T., Sunder, J., & Sunder, S. V. (2008). Accounting quality and debt contracting. The Accounting Review, 83(1), 1–28.
7) Billett, M. T., Flannery, M. J., & Garfinkel, J. A. (2006). Are bank loans special? Evidence on the post-announcement performance of bank borrowers. Journal of Financial and Quantitative Analysis, 41(4), 733–751.
8) Block, S. B. (1999). A study of financial analysts: Practice and theory. Financial Analysts Journal, 55(4), 86–95.
9) Bradshaw, M., Richardson, S., & Sloan, R. (2006). The relation between corporate financing activities, analysts' forecasts and stock returns. Journal of Accounting and Economics, 42(1-2),53-85.
10) Brown, L. D., & Caylor, M. L. (2006). Corporate governance and firm valuation. Journal of accounting and public policy, 25(4), 409-434.
11) Burgstahler, D., & Dichev, I. (1997). Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics, 24, 99-126.
12) Call, A. C., Donovan, J. B., & Jennings, J. (2022). Private lenders' use of analyst earnings forecasts when establishing debt covenant thresholds. The Accounting Review, 97(4), 187-207.
13) Chen, X., Cheng, Q., & Lo, A. K. (2013). Accounting Restatements and External Financing Choices. Contemporary Accounting Research, 30(2), 750-779.
14) Cheng, L.-Y., Sun, Y.-C., Yan, Z., & Zhao, Y. (2019). Corporate governance and target price accuracy. International Review of Financial Analysis, 64, 93-101.
15) Coyne, J., & Stice, D. (2018). Do banks care about analysts' forecasts when designing loan contracts?. Journal of Business Finance & Accounting, 45(5-6), 625-650.
16) De Bondt, W., & Thaler, R. (1990). Do security analysts overreact? The American Economic Review, 80(2), 52–57.
17) De Franco, G., Vasvari, F. P., Vyas, D., & Wittenberg-Moerman, R. (2014). Debt analysts’ views of debt-equity conflicts of interest. The Accounting Review,89(2), 571–604.
18) Eckbo, B. E., Masulis, R. W., & Norli, Ø. (2000). Seasoned public offerings: Resolution of the ‘new issues puzzle’. Journal of Financial Economics, 56(2), 251-291.
19) Fama, E. F., & French, K. R. (2004). The capital asset pricing model: Theory and evidence. Journal of economic perspectives, 18(3), 25-46.
20) Ferrer, E., Santamaría, R., & Suárez, N. (2019). Does analyst information influence the cost of debt? Some international evidence. International Review of Economics & Finance, 64, 323-342.
21) Flannery, M. J., & Rangan, K.P. (2006). Partial adjustment toward target capital structures. Journal of Financial Economics, 79(3), 469-506.
22) Frank, M. Z., & Goyal, V. K. (2003). Testing the pecking order theory of capital structure. Journal of Financial Economics, 67(2), 217-248.
23) Graham, J. R. (2000). How Big Are the Tax Benefits of Debt? The Journal of Finance, 55(5), 1901-1941.
24) Gu, Z., & Chen, T. (2004). Analysts’ treatment of nonrecurring items in street earnings. Journal of Accounting and Economics, 38(1), 129–170.
25) Hadlock, C. J., & James, C. M. (2002). Do banks provide financial slack? The Journal of Finance, 57(3), 1383–1419.
26) Harris, M., & Raviv, A. (1991). The theory of capital structure. The Journal of Finance, 46 (1), 297–355.
27) Healy, P. M., Hutton, A. P., & Palepu, K. G. (1999). Stock performance and intermediation changes surrounding sustained increases in disclosure. Contemporary Accounting Research, 16(3), 485–520.
28) Huang, R., Ritter, J. R., & Zhang, D. (2016). Private Equity Firms‟ Reputational Concerns and the Costs of Debt Financing. Journal of Financial and Quantitative Analysis, 51(1), 29-54.
29) Iselin, M., Park, M., & Van Buskirk, A. (2021). Seemingly inconsistent analyst revisions. Journal of Accounting and Economics, 71(1), 101339.
30) Jensen, M. C. (1986). Agency cost of free cash flow, corporate finance, and takeovers. American Economic Review, 76(2), 323–329.
31) Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
32) Jiang, J. X. (2008). Beating Earnings Benchmarks and the Cost of Debt. The Accounting Review, 83(2), 377-416.
33) Joos, P., Piotroski, J. D., & Srinivasan, S. (2016). Can analysts assess fundamental risk and valuation uncertainty? An empirical analysis of scenario-based value estimates. Journal of Financial Economics, 121(3), 645–663.
34) Jung, B., Shane, P. B., & Yang, Y. S. (2012). Do financial analysts’ long-term growth forecasts matter? Evidence from stock recommendations and career outcomes. Journal of Accounting and Economics, 53, 55–76.
35) Kasznik, R., & McNichols, M. F. (2002). Does meeting earnings expectations matter? Evidence from analyst forecast revisions and share prices. Journal of Accounting Research, 40(3), 727–759.
36) Kempf, E., Manconi, A., & Spalt, O. (2016). Distracted shareholders and corporate actions. The Review of Financial Studies, 30(5), 1660–1695.
37) Leary, M. T., & Roberts, M. R. (2005). Do Firms Rebalance Their Capital Structures? The Journal of Finance, 60(6), 2575-2619.
38) Loughran, T., & Ritter, J. R. (1997). The operating performance of firms conducting seasoned equity offerings. The journal of finance, 52(5), 1823-1850.
39) MacKay, P., & Phillips, G. M. (2005). How does industry affect firm financial structure? The Review of Financial Studies, 18(4), 1433–1466.
40) Minguez-Vera, A., & Martin-Ugedo, J. F. (2007). Does ownership structure affect value? A panel data analysis for the Spanish market. International Review of Financial Analysis, 16(1), 81–98.
41) Modigliani, F., & Miller, M. H. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
42) Papadaki, A. J., & Pavlopoulou-Lelaki, O. C. (2021). Sources of Corporate Financing and Operating Performance: The effects of strategic ownership and financial restatements. International Review of Financial Analysis, 76, 101732. https://doi.org/10.1016/j.irfa.2021.101732
43) Ritter, J. R. (2003). Chapter 5. Investment banking and securities issuance. In G. Constantinides, M. Harris, & R. M. Stulz (Eds.), Vol. 1. Handbook of the economics of finance (pp. 255–306). Amsterdam: North-Holland.
44) Ross, S. A. (2005). Capital structure and the cost of capital. Journal of Applied Finance (Formerly Financial Practice and Education) Journal of Applied Finance, 15(1),1-16.
45) Shenoy, C., & Koch, P. D. (1996). The firm‟s cash flow-leverage relationship. Journal of Empirical Finance, 2(4), 307-331.
46) Skinner, D. J., & Sloan, R. G. (2002). Earnings surprises, growth expectations, and stock returns or don’t let an earnings Torpedo sink your portfolio. Review of Accounting Studies, 7(2–3), 289–312.
47) Spiess, D. K., & Affleck-Graves, J. (1999). The long-run performance of stock returns following debt offerings. Journal of Financial Economics, 54(1), 45-73.
48) Thomsen, S., & Pedersen, T. (2000). Ownership structure and economic performance in the largest European companies. Strategic Management Journal, 21, 689-705.
49) Williams, P. (1996). The relation between a prior earnings forecast by management and analyst response to a current management forecast. The Accounting Review, 71(1), 103–115.
50) Wilson, W. M. (2008). An empirical analysis of the decline in the information content of earnings following restatements. The Accounting Review, 83(2), 519–548.
|_