Acceso al sitio web del Consejo de Políticas de Infraestructura

   
ARTÍCULO
TITULO

The impact of leverage on investment decisions for South African firms with different growth opportunities

Miriam Mondosha    
Akios Majoni    

Resumen

AbstractResearch has documented a significant relationship between financial leverage and investment decisions, however divergent views exist about whether this relationship is explained by the underinvestment hypothesis or the overinvestment hypothesis. This study examines the relationship between financial leverage and investment decisions for firms with different growth opportunities, it is based on a sample of 51 industrial sector firms listed on the Johannesburg Stock Exchange (JSE), South Africa, over the period from 2008 to 2014. Using panel data and after controlling for heterogeneity across firms, we report a negative relationship between leverage and investment. However, the relationship is significant for firms with high growth opportunities and insignificant for firms in the low growth category. The results support the underinvestment theory that debt overhang reduces the incentives of firms exploiting valuable opportunities.

PÁGINAS
MATERIAS
ECONOMÍA

 Artículos similares

       
 
Resa Enjelina Brutu, Mila Yulia Herosian, Bella Christen Panjaitan     Pág. 1 - 13
This study plans to conclude whether liquidity generally affects industrial points in the Food and Beverage Industry Sub-Area at the Gathering Association written on the IDX. The impact mostly affects organizational points in the Food and Beverage Indust... ver más

 
Tina Novianti Sitanggang, Hendrico Sipahutar, Tina Hastarina Wau     Pág. 833 - 843
The assessment is aimed at analyzing how much influence the Accounting Profit, Total Cash Flow, NPM, and Laverage Level on Stock Returns in Insurance Companies. In this study the population used is one of the Insurance Companies Liste on the IDX in 2015-... ver más

 
Md. Nur Alam Siddik, Md. Emran Hosen, Md. Firoze Miah, Sajal Kabiraj, Shanmugan Joghee and Swamynathan Ramakrishnan    
A stable and healthy insurance industry plays a vital role in sustaining an economy resistant to economic shocks by providing an efficient risk-transition mechanism. There is a relative scarcity of research inspecting the impact of insurers? financial in... ver más

 
Serkan Karadas, Jorida Papakroni and Minh Tam Tammy Schlosky    
This study examines the relationship between corporate managers? political ideology and corporate leverage policies conditional on investor sentiment. Based on a minimum of 21,884 observations over the 1992?2008 period, the authors show that Republican m... ver más

 
Liam Hyland,Avani Sebastian,Yudhvir Seetharam    
AbstractOrientation: Behavioural finance research suggests that human biases can cause irrationalities which have a significant impact on decision making. Discovery Bank is an organisation that attempts to apply behavioural finance to improve the financi... ver más