Firm’s Risk and Capital Structure: An Empirical Analysis of Seasonal and Non-Seasonal Businesses

• 발행기관: 한국유통과학회
• 저자명: Safdar Husain TAHIR Mirza Muhammad MOAZZAM Nayyer SULTANA Gulzar AHMAD Ghulam SHABIR Filza NOSHEEN
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.12, 627~633쪽, 전체 7쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.12.30

영문 초록

The study attempts to analyze the impact of firm’s risk on capital structure in the context of seasonal and non-seasonal businesses. We use two independent variables namely credit risk and systematic risk and one dependent variable to explore this connection. Sugar sector is taken as seasonal while the textile sector as non-seasonal businesses. The panel data of twenty-five firms from each sector are taken ranging for the period of 2012 to 2019 which has been retrieved from their annual reports for empirical analysis of the study. The results reveal the negative impact of credit risk on capital structure in both types of businesses. Increasing (decreasing) one point of credit risk causes a decrease (increase) leverage ratio by 0.27 points for seasonal while increasing (decreasing) one point of credit risk causes to decrease (increase) leverage by 0.15 points for non-seasonal businesses. Furthermore, the study shows positive impact of systematic risk on leverage ratio in non-seasonal business and no impact in seasonal business. Any increase (decrease) in the systematic risk causes an incline (decline) leverage ratio by 2.68 units for non-seasonal businesses. The study provides a guideline to managers for risk management in businesses. The research focusses on theoretical as well as managerial and policy implications on risk management in businesses.

목차

1. Introduction

2. Literature Review

3. Data and Methodology

4. Empirical Results

5. Discussions and Conclusions

References

키워드

Leverage Ratio Credit Risk Systematic Risk Seasonal Business Non-Seasonal Business