Growth and Profitability in Portuguese Companies: a Dynamic Panel Data Approach

In this article, using dynamic panel estimators, we test empirically the relationship between the growth of Portuguese companies and their profitability. The empirical evidence obtained indicates that growth in Portuguese companies means increased profitability. Growth in Portuguese companies is a catalysing factor of profitability, with the motivational effect on employees, given the expectation of greater gains in the future, being more relevant than the possible negative effects of growth on profitability, as a consequence of the need for new more formal labour relations in companies.company growth, dynamic estimators, profitability

The Influence of Age and Size on Family-Owned Firms’ Financing Decisions: Empirical Evidence Using Panel Data

Based on four samples of Portuguese family-owned firmsdi) 185 young, low-sized family-owned firms; ii) 167 young, high-sized familyowned firms; iii) 301 old, low-sized family-owned firms; and iv) 353 old, high-sized family-owned firms d we show that age and size are fundamental characteristics in family-owned firms’ financing decisions. The multiple empirical evidence obtained allows us to conclude that the financing decisions of young, low-sized family-owned firms are quite close to the assumptions of Pecking Order Theory, whereas those of old, high-sized family-owned firms are quite close to what is forecast by Trade-Off Theory. The lesser information asymmetry associated with greater age, the lesser likelihood of bankruptcy associated with greater size, as well as the lesser concentration of ownership and management consequence of greater age and size, may be especially important in the financing decisions of family-owned firms. In addition, we find that GDP, interest rate and periods of crisis have a greater effect on the debt of young, low-sized family-owned firms than on that of family-owned firms of the remainder research samples

A informação contabilística na tomada de decisão dos empresários e/ou gestores

A informação é considerada como um instrumento indispensável quer para o exercício das actividades dos empresários/gestores, quer para a tomada de decisão, uma vez que a qualidade das decisões está muitas vezes dependente da qualidade da informação. Deste modo, pretendeu-se analisar a importância atribuída à informação contabilística pelos empresários/gestores das pequenas empresas, na tomada de decisão estratégica, bem como na tomada de decisão operacional. Os resultados evidenciam que os empresários/gestores atribuem um grau de “bastante importante” à utilização da informação contabilística na tomada de decisão, e consideram mais importante a elaboração das demonstrações financeiras para sustentar o processo da tomada de decisão, do que para o cumprimento das obrigações legais, apesar deste último aspecto ser também um factor preponderante nas empresas. No que respeita às decisões financeiras verificou-se que os dirigentes valorizam mais a informação contabilística na tomada de decisões de investimento e operacionais, do que nas decisões de financiamento e de distribuição de dividendos

The zero-leverage phenomenon in European listed firms: A financing decision or an imposition of the financial market?

This article provides empirical evidence on the zero-leverage phenomenon for a sample of European listed firms for the period 1995–2016. It is shown that there are two types of firms with zero leverage: the financially constrained firms that face obstacles in obtaining external finance, as predicted by the financial constraints hypothesis; and the financially unconstrained firms that maintain zero leverage as a consequence of a financing decision, which supports the financial flexibility hypothesis. The zero-leverage phenomenon is also influenced by the financial system that prevails in each country, being boosted (inhibited) in market-based (bank-based) financial systems, and by the country’s macroeconomic conditions, with the recent financial and sovereign debt crises increasing the propensity for zero leverage in market-based countries. We also find that the financial flexibility hypothesis seems to be more important in market-based systems and that the financial constraints approach did not gain importance during the crisis period. Our results are robust to the use of alternative measures of debt conservatism, explanatory variables, and econometric methods and maintain their validity when we allow for endogeneity in firm size and dividend payments.info:eu-repo/semantics/publishedVersio

Are Capital Structure Decisions of Family-Owned SMEs Different? Empirical Evidence From Portugal

This study analyses if ownership structure is an important determinant of capital structure decisions, on basis of two sub-samples of family-owned and non-family owned SMEs, sing panel data models. The results suggest that family ownership is an important determinant for: i) the variations of short and long-term debt stimulated by the financial deficit; and ii) the rate of adjustment of short and long-term debt toward the respective target levels. The empirical evidence obtained in this study suggests that family-owned firms have the possibility to reach their target short and long-term debt ratios, corroborating the assumptions of Trade-Off Theory. Whereas non-family owned firms follow almost exclusively the behaviour forecasted by Pecking Order Theory, i.e., when internal finance is insufficient, those firms turn to short-term debt, and their variations of short-term debt are almost exclusively a consequence of the financial deficit.Family-Owned SMEs, Long-Term Debt; Non-Family Owned SMEs, Panel Data Models, Short-Term Debt.

On the relationship between intellectual capital and financial performance: A panel data analysis on SME hotels

This paper analysed the effect of intellectual capital on small and medium-sized hotel financial performance for the period between 2007 and 2015. Using a sample of 934 Portuguese small and medium-sized hotels, this study adopted the GMM system (1998) estimator, to analyse a dynamic panel data. The findings suggested that intellectual capital components, i.e., human capital, structural capital and relational capital provide a positive impact on hotel financial performance. Human capital and relational capital seemed to be key elements for the success of hotels, being the basis of service quality in the hotels sector. Furthermore, the results showed that human capital and structural capital are capitalized by the establishment and maintenance of long-term relationships with key stakeholders. These findings indicated that the interaction between intellectual capital components enhances the hotel financial performance. Herein, it is highlighted the importance of intellectual capital in small and medium-sized hotel financial performance.info:eu-repo/semantics/publishedVersio

Managers’ Competences in Private Hospitals for Investment Decisions during the COVID-19 Pandemic

The COVID-19 pandemic has posed an unprecedented challenge for health systems worldwide. The increased demand for investment in hospitals has become one of the greatest financial vulnerabilities, and in this context, the manager’s involvement in decision-making is associated with better analysis in order to achieve better results. This article aims to define a model to outline the manager profile in private hospitals, as well as the process and the relationship with investment decision-making, so as to guide future work to improve institutions’ performance and ensure the sustainability of patient care processes and the use of resources. Semi-structured interviews were held with an administrative (or financial) director in Brazil, Canada and Portugal and analyzed by the conventional content analysis method and coded, using NVivo 11, identifying the main topics. A model for investment decision-making is proposed to improve resource allocation and performance. The results indicate, for multidisciplinary training, where managers contribute to an efficient use of resources and contribute to the maintenance of quality of care, including about investment and financing of hospitals, where performance analysis reflects on decision-making.info:eu-repo/semantics/publishedVersio

Capital structure of listed portuguese companies: determinants of debt adjustment

Purpose – This study aims to evaluate the impact of listed Portuguese companies' specific determinants on adjustment of actual debt towards target debt ratio. The specific determinants on adjustment of actual debt towards target debt ratio that we consider are: asset tangibility, size, profitability and market to book ratio. Design/methodology/approach – Dynamic panel estimators are used to determine adjustment of the actual level of debt towards optimal level of debt, revealing the level of transaction costs borne by companies. OLS regressions are also used, in order to estimate the impacts of companies' specific determinants on debt adjustment. Findings – The results suggest that transaction costs are relevant in listed Portuguese companies' access to debt. Tangibility of assets and size are determinants that contribute for a greater adjustment of debt towards optimal level. The results also suggest that the capital structure decisions of listed Portuguese companies can be explained in the light of trade-off and pecking order theories, and not according to what is forecast by market timing theory. Originality/value – Through this study, the level of adjustment of actual debt towards target debt ratio in the context of companies belonging to under-developed capital markets are determined, in the particular case of this study, belonging to the Portuguese capital market. Furthermore, from target debt ratio depending on companies' specific determinants, the explanatory power of trade-off, pecking order and market timing theories are investigated. The results contribute for a deeper understanding about companies' capital structure decisions

Trade-Off Theory versus Pecking Order Theory: capital structure decisions in a peripheral region of Portugal

This paper seeks to analyse whether the capital structure decisions of Small and Medium-Sized Enterprises (SMEs) are closer to the assumptions of Trade-Off Theory or to those of Pecking Order Theory. We use a sample of SMEs located in the interior region of Portugal, using the LSDVC dynamic estimator as method of estimation, the empirical evidence obtained allows us to conclude that the most profitable and oldest SMEs resort less to debt, which corroborates the forecasts of Pecking Order Theory. SMEs, with greater size, resort more to debt, corroborating the forecasts of Trade-Off Theory and Pecking Order Theory. In addition, SMEs adjust noticeably their current level of debt towards the optimal debt ratio, which corroborates what is forecast by Trade-Off Theory. Therefore, this paper enhances that Trade-Off and Pecking Order Theories are not mutually exclusive in explaining the capital structure decisions of SMEs. The results suggest that younger and smaller SMEs should be object of public financing support, when the internal financing is clearly insufficient to fund those firms’ activities

The Relationship Between Investment and Internal Cash Flows in VC-Backed SMEs: Does firm size matter?

Using panel data models and two research sub-samples composed of smaller and larger VC-backed, this study seeks to analyze the relationship between investment and internal cash flows. The results indicate that the investment sensitivity to internal cash flows is greater in larger than in the smaller VC-backed SMEs. Debt is more important for smaller than for larger VC-backed SME investment. The moderation effect of VC ownership reduces the magnitudes of the positive impact of cash flows and debt as well as the negative effect of growth opportunities on investment in both smaller and larger VC-backed SMEs