Corporate financial strategies and performance: Insights from China’s Shanghai Stock Exchange
This study investigated the impact of corporate financial strategies-(CFSs) on the performance of companies listed on the Shanghai Stock Exchange-(SSE) from 2010-2023, analyzing data from 2,269 firms, yielding 31,766 balanced firm-year observations. Utilizing a mixed-methods approach with a quasi-ex...
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| Format: | Article |
| Language: | English |
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Growing Science
2025-01-01
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| Series: | Accounting |
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| _version_ | 1826878951850508288 |
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| author | Ronald Ebenezer Essel |
| author_facet | Ronald Ebenezer Essel |
| author_sort | Ronald Ebenezer Essel |
| collection | DOAJ |
| description | This study investigated the impact of corporate financial strategies-(CFSs) on the performance of companies listed on the Shanghai Stock Exchange-(SSE) from 2010-2023, analyzing data from 2,269 firms, yielding 31,766 balanced firm-year observations. Utilizing a mixed-methods approach with a quasi-experimental design grounded in pragmatism, the inquiry employed two-step System-GMM technique to address endogeneity, simultaneity, heteroscedasticity, reverse causality and Nickell bias. Fixed effects-(FE) and random effects-(RE) models were applied to handle unobserved heterogeneity, omitted variable bias and guarantee robustness. The results revealed that, total-debt-to-assets-ratio-(TDTAR) and dividend yield-(DY) significantly and negatively impacted firm performance-(FP), measured by return on assets-(ROA) and Tobin’s Q-(TQ). Contrary, cash conversion cycle-(CCC), current ratio-(CR), total-assets-turnover-(TAT), tangibility-(TANG), total-equity-to-total-assets ratio-(TETAR), dividend payout ratio-(DPR), firm size-(SIZE), and firm age-(AGE) had a significantly positive effect on FP-(ROA and TQ). The study emphasizes the importance of effective CFSs in improving FP and offers insights for policymakers, investors, and managers, highlighting the need for corporate deleveraging, capital structure optimization and efficient asset and working capital management. Although focused on China, the study’s framework is applicable to other emerging markets, providing valuable theoretical, conceptual, and methodological insights as it integrates CFS metrics into the resource-based view theory-(RBVT), extending the theory’s scope making it more robust and generalizable. |
| first_indexed | 2025-02-17T01:49:46Z |
| format | Article |
| id | doaj.art-04cfc398a5b44881960c801fbe093ed0 |
| institution | Directory Open Access Journal |
| issn | 2369-7393 2369-7407 |
| language | English |
| last_indexed | 2025-02-17T01:49:46Z |
| publishDate | 2025-01-01 |
| publisher | Growing Science |
| record_format | Article |
| series | Accounting |
| spelling | doaj.art-04cfc398a5b44881960c801fbe093ed02025-01-12T13:34:09ZengGrowing ScienceAccounting2369-73932369-74072025-01-0111111810.5267/j.ac.2025.1.002Corporate financial strategies and performance: Insights from China’s Shanghai Stock ExchangeRonald Ebenezer EsselThis study investigated the impact of corporate financial strategies-(CFSs) on the performance of companies listed on the Shanghai Stock Exchange-(SSE) from 2010-2023, analyzing data from 2,269 firms, yielding 31,766 balanced firm-year observations. Utilizing a mixed-methods approach with a quasi-experimental design grounded in pragmatism, the inquiry employed two-step System-GMM technique to address endogeneity, simultaneity, heteroscedasticity, reverse causality and Nickell bias. Fixed effects-(FE) and random effects-(RE) models were applied to handle unobserved heterogeneity, omitted variable bias and guarantee robustness. The results revealed that, total-debt-to-assets-ratio-(TDTAR) and dividend yield-(DY) significantly and negatively impacted firm performance-(FP), measured by return on assets-(ROA) and Tobin’s Q-(TQ). Contrary, cash conversion cycle-(CCC), current ratio-(CR), total-assets-turnover-(TAT), tangibility-(TANG), total-equity-to-total-assets ratio-(TETAR), dividend payout ratio-(DPR), firm size-(SIZE), and firm age-(AGE) had a significantly positive effect on FP-(ROA and TQ). The study emphasizes the importance of effective CFSs in improving FP and offers insights for policymakers, investors, and managers, highlighting the need for corporate deleveraging, capital structure optimization and efficient asset and working capital management. Although focused on China, the study’s framework is applicable to other emerging markets, providing valuable theoretical, conceptual, and methodological insights as it integrates CFS metrics into the resource-based view theory-(RBVT), extending the theory’s scope making it more robust and generalizable.capital structure management strategiesdividend policy decisionsfixed assets and capital budgeting management strategiesperformanceworking capital management strategies |
| spellingShingle | Ronald Ebenezer Essel Corporate financial strategies and performance: Insights from China’s Shanghai Stock Exchange Accounting capital structure management strategies dividend policy decisions fixed assets and capital budgeting management strategies performance working capital management strategies |
| title | Corporate financial strategies and performance: Insights from China’s Shanghai Stock Exchange |
| title_full | Corporate financial strategies and performance: Insights from China’s Shanghai Stock Exchange |
| title_fullStr | Corporate financial strategies and performance: Insights from China’s Shanghai Stock Exchange |
| title_full_unstemmed | Corporate financial strategies and performance: Insights from China’s Shanghai Stock Exchange |
| title_short | Corporate financial strategies and performance: Insights from China’s Shanghai Stock Exchange |
| title_sort | corporate financial strategies and performance insights from china s shanghai stock exchange |
| topic | capital structure management strategies dividend policy decisions fixed assets and capital budgeting management strategies performance working capital management strategies |
| work_keys_str_mv | AT ronaldebenezeressel corporatefinancialstrategiesandperformanceinsightsfromchinasshanghaistockexchange |