CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIAS EMERGING CAPITAL MARKET
This study investigates the relationship between leverage andfuture corporate growth, using aten-yearsampleofIndonesianfirms. Theleverageeffectisfoundtobeinsignificantfortheoverall sample, unlike the earlierfindings by Lang et al. (1996) for firms in a well-developed market such as the U.S. However,...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
People & Global Business Association (P&GBA)
2004-06-01
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| Series: | Global Business and Finance Review |
| Subjects: | |
| Online Access: | http://www.gbfrjournal.org/pds/journal/thesis/20150624134951-MOUH9.pdf |
| _version_ | 1798028647886487552 |
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| author | Barry Lin T Chotigeat Bingsheng Yi |
| author_facet | Barry Lin T Chotigeat Bingsheng Yi |
| author_sort | Barry Lin |
| collection | DOAJ |
| description | This study investigates the relationship between leverage andfuture corporate growth, using aten-yearsampleofIndonesianfirms. Theleverageeffectisfoundtobeinsignificantfortheoverall sample, unlike the earlierfindings by Lang et al. (1996) for firms in a well-developed market such as the U.S. However, when firms are sorted by size and Tobins q, only the small low-q firms indicate a statistically significant negative effect of leverage on future corporate growth. This is evidence consistent with the fact that the Indonesian economy has been dominated by large firms which have better access to capital markets, and also that small firms with high growth potential do not suffer from debt-overhang, although smallfirms with low growth potential do. |
| first_indexed | 2024-04-11T19:12:53Z |
| format | Article |
| id | doaj.art-05bdfd82b727413ab95c3a054d1d4392 |
| institution | Directory Open Access Journal |
| issn | 1088-6931 2384-1648 |
| language | English |
| last_indexed | 2024-04-11T19:12:53Z |
| publishDate | 2004-06-01 |
| publisher | People & Global Business Association (P&GBA) |
| record_format | Article |
| series | Global Business and Finance Review |
| spelling | doaj.art-05bdfd82b727413ab95c3a054d1d43922022-12-22T04:07:33ZengPeople & Global Business Association (P&GBA)Global Business and Finance Review1088-69312384-16482004-06-01926776CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIAS EMERGING CAPITAL MARKETBarry Lin0T Chotigeat1Bingsheng Yi2University of South Florida-SarasotaNicholls State University, USAUniversity of South Florida-SarasotaThis study investigates the relationship between leverage andfuture corporate growth, using aten-yearsampleofIndonesianfirms. Theleverageeffectisfoundtobeinsignificantfortheoverall sample, unlike the earlierfindings by Lang et al. (1996) for firms in a well-developed market such as the U.S. However, when firms are sorted by size and Tobins q, only the small low-q firms indicate a statistically significant negative effect of leverage on future corporate growth. This is evidence consistent with the fact that the Indonesian economy has been dominated by large firms which have better access to capital markets, and also that small firms with high growth potential do not suffer from debt-overhang, although smallfirms with low growth potential do.http://www.gbfrjournal.org/pds/journal/thesis/20150624134951-MOUH9.pdfcorporate leveragefuture growthemerging capital marketleverage effect |
| spellingShingle | Barry Lin T Chotigeat Bingsheng Yi CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIAS EMERGING CAPITAL MARKET Global Business and Finance Review corporate leverage future growth emerging capital market leverage effect |
| title | CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIAS EMERGING CAPITAL MARKET |
| title_full | CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIAS EMERGING CAPITAL MARKET |
| title_fullStr | CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIAS EMERGING CAPITAL MARKET |
| title_full_unstemmed | CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIAS EMERGING CAPITAL MARKET |
| title_short | CORPORATE LEVERAGE AND FUTURE GROWTH: EVIDENCE FROM INDONESIAS EMERGING CAPITAL MARKET |
| title_sort | corporate leverage and future growth evidence from indonesias emerging capital market |
| topic | corporate leverage future growth emerging capital market leverage effect |
| url | http://www.gbfrjournal.org/pds/journal/thesis/20150624134951-MOUH9.pdf |
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