ANALYZING OWNERSHIP STRUCTURES AND DEBT MATURATION IN THE TEXTILE INDUSTRY DURING THE GLOBAL PANDEMIC
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Dec 26, 2023
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Abstract
The study examined the impact of ownership structure on firm’s debt maturity. In this study data is collected from 93 Non-financial firms that are listed in PSX Pakistan Stock Exchange. The data is collected for the period of 2015 to 2020. Non-financial firms included only Textile sector of Pakistan. The principal source of this data is the website State Bank of Pakistan (SBP) published as Financial Statement Analysis (FSA) of listed non-financial firms. Study used panel data analysis to find out the relationship between debt maturity and ownership structure. Various models are employed for data analysis, including ordinary least square (OLS), fixed effect (FE), and random effect (RE). Covid-19 used as a dummy variable in the research. The data showed that insider ownership had a positive and significant effect on debt maturity, while ownership concentration had a negative and significant effect. This study will help managers make choices about when to pay off debt and how to organize ownership.
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References
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performance: A case of non-financial listed companies of Pakistan. World Applied Sciences Journal, 21(8), 1141–1152. doi: 10.5829/idosi.wasj.2013.21.8.1916
An, Z., Chen, C., Li, D., & Yin, C. (2021). Foreign institutional ownership and the speed of
leverage adjustment: International evidence. Journal of Corporate Finance, 68. doi: 10.1016/j.jcorpfin.2021.101966
Charfeddine, L., & Elmarzougui, A. (2010). 35 Institutional Ownership and Firm Performance:
Evidence from France Institutional Ownership and Firm Performance: Evidence from France.
Do, T. V. T. (2021). Determinants of corporate debt maturity: Evidence from the consumer
goods sector in Vietnam. Investment Management and Financial Innovations, 18(3), 175–182. doi: 10.21511/imfi.18(3).2021.16
Feito-Ruiz, I., Cardone-Riportella, C., & Ughetto, E. (2021). Debt maturity and SMEs: Do
auditor’s quality and ownership structure matter? Journal of Small Business Management. doi: 10.1080/00472778.2020.1866765
Gujarati, D. (2014). Econometrics by Example, Paperback.
Habib, S. M., Hussain, H., Al-Faryan, M. A. S., & Hussain, R. Y. (2022). Impact of firm characteristics and ownership structure on firm efficiency: evidence from non-financial firms of Pakistan. Cogent Economics & Finance, 10(1), 2106628
Hajiha, Z., & Akhlaghi, H. A. (2011). Ownership Structure and Debt Maturity Structure: An
Empirical Study on Iranian Firms. Middle-East Journal of Scientific Research. Retrieved from https://www.researchgate.net/publication/267685621
Huo, X., Lin, H., Meng, Y., & Woods, P. (2021). Institutional investors and cost of capital: The
Hussain, R. Y., Wen, X., Hussain, H., Saad, M., & Zafar, Z. (2022a). Do leverage decisions
mediate the relationship between board structure and insolvency risk? A comparative mediating role of capital structure and debt maturity. South Asian Journal of Business Studies, 11(1), 104–125. doi: 10.1108/SAJBS-05-2020-0150
Hussain, Rana Yassir, Wen Xuezhou, Haroon Hussain, Muhammad Saad, and Sikander Ali Qalati. (2022b). Corporate board vigilance and insolvency risk: a mediated moderation model of debt maturity and fixed collaterals." International Journal of Management and Economics, 57(1), 14-33.
Lean, H. H., Wei, I., Ting, K., & Kweh, Q. L. (2015). Ownership Concentration, Family
Ownership and Leverage: Evidence from Malaysia. Malaysian Journal of Economic Studies, 52(2), 117–133.
Martins, H. C., Schiehll, E., & Terra, P. R. S. (2020). Do shareholder protection and creditor
rights have distinct effects on the association between debt maturity and ownership structure? Journal of Business Finance and Accounting, 47(5–6), 708–729. doi: 10.1111/jbfa.12430
Mbanyele, W. (2020). Ownership concentration, firm life cycle, and leverage: Evidence from
Italian family firms. Cogent Economics and Finance, 8(1). doi:10.1080/23322039.2020.1838687 moderating effect of ownership structure. Plos one, 16(4), e0249963.
Muñoz Mendoza, J. A., Sepúlveda Yelpo, S. M., & Veloso Ramos, C. L. (2019). Non-linear
Effects ofOwnership Structure, Growth Opportunities and Leverage on Debt Maturity in Chilean Firms. Revista Mexicana de Economía y Finanzas, 14(1), 21–40. doi: 10.21919/remef.v14i1.357
Prakash, N., Maheshwari, A., & Hawaldar, A. (2022). The impact of Covid-19 on the capital
Rasool, I. (2020). Impact of Ownership Structure on Corporate Debt Maturity: An Empirical Study of Non-Financial Sector of Pakistan.
Ruan, W., Cullen, G., Ma, S., & Xiang, E. (2014). Ownership control and debt maturity
structure:evidence from China. Retrieved from https://ro.uow.edu.au/buspapers/387
Shan, Y., & Xu, L. (2011). Analysis of firm efficiency and performance in the Chinese finance
industry from ownership perspective (Doctoral dissertation, Virtus Interpress). Structure in emerging economies: evidence from India. Asian Journal of Accounting Research, (ahead-of-print).
Tsai, H., & Gu, Z. (2007). Institutional Ownership and Firm Performance: Empirical Evidence
from U.S.Based Publicly Traded Restaurant Firms. Journal of Hospitality and Tourism Research, 31(1), 19–38. doi: 10.1177/1096348006296056
Wang, X., Manry, D., & Rosa, G. (2019). Ownership structure, economic fluctuation, and capital structure: Evidence from China. International Journal of Finance & Economics, 24(2), 841-854.
Xuezhou, W., Hussain, R. Y., Salameh, A. A., Hussain, H., Khan, A. B., & Fareed, M. (2022a). Does Firm Growth Impede or Expedite Insolvency Risk? A Mediated Moderation Model of Leverage Maturity and Potential Fixed Collaterals. Frontiers in Environmental Science, 120.
Xuezhou, W., Hussain, R. Y., Hussain, H., Saad, M., & Qalati, S. A. (2022b). Analyzing the impact of board vigilance on financial distress through the intervention of leverage structure and interaction of asset tangibility in the non-financial sector of Pakistan. International Journal of Financial Engineering, 9(02), 2150004.
performance: A case of non-financial listed companies of Pakistan. World Applied Sciences Journal, 21(8), 1141–1152. doi: 10.5829/idosi.wasj.2013.21.8.1916
An, Z., Chen, C., Li, D., & Yin, C. (2021). Foreign institutional ownership and the speed of
leverage adjustment: International evidence. Journal of Corporate Finance, 68. doi: 10.1016/j.jcorpfin.2021.101966
Charfeddine, L., & Elmarzougui, A. (2010). 35 Institutional Ownership and Firm Performance:
Evidence from France Institutional Ownership and Firm Performance: Evidence from France.
Do, T. V. T. (2021). Determinants of corporate debt maturity: Evidence from the consumer
goods sector in Vietnam. Investment Management and Financial Innovations, 18(3), 175–182. doi: 10.21511/imfi.18(3).2021.16
Feito-Ruiz, I., Cardone-Riportella, C., & Ughetto, E. (2021). Debt maturity and SMEs: Do
auditor’s quality and ownership structure matter? Journal of Small Business Management. doi: 10.1080/00472778.2020.1866765
Gujarati, D. (2014). Econometrics by Example, Paperback.
Habib, S. M., Hussain, H., Al-Faryan, M. A. S., & Hussain, R. Y. (2022). Impact of firm characteristics and ownership structure on firm efficiency: evidence from non-financial firms of Pakistan. Cogent Economics & Finance, 10(1), 2106628
Hajiha, Z., & Akhlaghi, H. A. (2011). Ownership Structure and Debt Maturity Structure: An
Empirical Study on Iranian Firms. Middle-East Journal of Scientific Research. Retrieved from https://www.researchgate.net/publication/267685621
Huo, X., Lin, H., Meng, Y., & Woods, P. (2021). Institutional investors and cost of capital: The
Hussain, R. Y., Wen, X., Hussain, H., Saad, M., & Zafar, Z. (2022a). Do leverage decisions
mediate the relationship between board structure and insolvency risk? A comparative mediating role of capital structure and debt maturity. South Asian Journal of Business Studies, 11(1), 104–125. doi: 10.1108/SAJBS-05-2020-0150
Hussain, Rana Yassir, Wen Xuezhou, Haroon Hussain, Muhammad Saad, and Sikander Ali Qalati. (2022b). Corporate board vigilance and insolvency risk: a mediated moderation model of debt maturity and fixed collaterals." International Journal of Management and Economics, 57(1), 14-33.
Lean, H. H., Wei, I., Ting, K., & Kweh, Q. L. (2015). Ownership Concentration, Family
Ownership and Leverage: Evidence from Malaysia. Malaysian Journal of Economic Studies, 52(2), 117–133.
Martins, H. C., Schiehll, E., & Terra, P. R. S. (2020). Do shareholder protection and creditor
rights have distinct effects on the association between debt maturity and ownership structure? Journal of Business Finance and Accounting, 47(5–6), 708–729. doi: 10.1111/jbfa.12430
Mbanyele, W. (2020). Ownership concentration, firm life cycle, and leverage: Evidence from
Italian family firms. Cogent Economics and Finance, 8(1). doi:10.1080/23322039.2020.1838687 moderating effect of ownership structure. Plos one, 16(4), e0249963.
Muñoz Mendoza, J. A., Sepúlveda Yelpo, S. M., & Veloso Ramos, C. L. (2019). Non-linear
Effects ofOwnership Structure, Growth Opportunities and Leverage on Debt Maturity in Chilean Firms. Revista Mexicana de Economía y Finanzas, 14(1), 21–40. doi: 10.21919/remef.v14i1.357
Prakash, N., Maheshwari, A., & Hawaldar, A. (2022). The impact of Covid-19 on the capital
Rasool, I. (2020). Impact of Ownership Structure on Corporate Debt Maturity: An Empirical Study of Non-Financial Sector of Pakistan.
Ruan, W., Cullen, G., Ma, S., & Xiang, E. (2014). Ownership control and debt maturity
structure:evidence from China. Retrieved from https://ro.uow.edu.au/buspapers/387
Shan, Y., & Xu, L. (2011). Analysis of firm efficiency and performance in the Chinese finance
industry from ownership perspective (Doctoral dissertation, Virtus Interpress). Structure in emerging economies: evidence from India. Asian Journal of Accounting Research, (ahead-of-print).
Tsai, H., & Gu, Z. (2007). Institutional Ownership and Firm Performance: Empirical Evidence
from U.S.Based Publicly Traded Restaurant Firms. Journal of Hospitality and Tourism Research, 31(1), 19–38. doi: 10.1177/1096348006296056
Wang, X., Manry, D., & Rosa, G. (2019). Ownership structure, economic fluctuation, and capital structure: Evidence from China. International Journal of Finance & Economics, 24(2), 841-854.
Xuezhou, W., Hussain, R. Y., Salameh, A. A., Hussain, H., Khan, A. B., & Fareed, M. (2022a). Does Firm Growth Impede or Expedite Insolvency Risk? A Mediated Moderation Model of Leverage Maturity and Potential Fixed Collaterals. Frontiers in Environmental Science, 120.
Xuezhou, W., Hussain, R. Y., Hussain, H., Saad, M., & Qalati, S. A. (2022b). Analyzing the impact of board vigilance on financial distress through the intervention of leverage structure and interaction of asset tangibility in the non-financial sector of Pakistan. International Journal of Financial Engineering, 9(02), 2150004.