Impact of goodwill on firms’ capital structure in developing countries

Goodwill assets are considered to be a building block to reduce some concerns surrounding the capital structure puzzle. This article investigates goodwill assets as a determinant of firms' capital structure using 4912 listed firms from 23 developing countries. This article applies the two-step...

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Main Authors: Thakur, Oli Ahad, Amin Noordin, Bany Ariffin, Tunde, Matemilola Bolaji, Razman, Ahmed, Satiawan, Doddy
Format: Article
Language:English
Published: Rajshahi 2020
Online Access:http://psasir.upm.edu.my/id/eprint/89284/1/DEBT.pdf
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author Thakur, Oli Ahad
Amin Noordin, Bany Ariffin
Tunde, Matemilola Bolaji
Razman, Ahmed
Satiawan, Doddy
author_facet Thakur, Oli Ahad
Amin Noordin, Bany Ariffin
Tunde, Matemilola Bolaji
Razman, Ahmed
Satiawan, Doddy
author_sort Thakur, Oli Ahad
collection UPM
description Goodwill assets are considered to be a building block to reduce some concerns surrounding the capital structure puzzle. This article investigates goodwill assets as a determinant of firms' capital structure using 4912 listed firms from 23 developing countries. This article applies the two-step system GMM as the main estimation technique because it mitigates the endogeneity problem. Moreover, it applies the Fixed Effect and Random Effect models as robust checks. The results show that goodwill assets are significantly and positively related to firms' capital structure in the two-step system GMM model as well as in the Fixed Effect and Random Effect models. Based on these results, goodwill assets emerge as a potential determinant of capital structure, which implies that goodwill assets could serve as collateral to obtain debt capital.
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spelling upm.eprints-892842021-09-20T11:53:55Z http://psasir.upm.edu.my/id/eprint/89284/ Impact of goodwill on firms’ capital structure in developing countries Thakur, Oli Ahad Amin Noordin, Bany Ariffin Tunde, Matemilola Bolaji Razman, Ahmed Satiawan, Doddy Goodwill assets are considered to be a building block to reduce some concerns surrounding the capital structure puzzle. This article investigates goodwill assets as a determinant of firms' capital structure using 4912 listed firms from 23 developing countries. This article applies the two-step system GMM as the main estimation technique because it mitigates the endogeneity problem. Moreover, it applies the Fixed Effect and Random Effect models as robust checks. The results show that goodwill assets are significantly and positively related to firms' capital structure in the two-step system GMM model as well as in the Fixed Effect and Random Effect models. Based on these results, goodwill assets emerge as a potential determinant of capital structure, which implies that goodwill assets could serve as collateral to obtain debt capital. Rajshahi 2020 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/89284/1/DEBT.pdf Thakur, Oli Ahad and Amin Noordin, Bany Ariffin and Tunde, Matemilola Bolaji and Razman, Ahmed and Satiawan, Doddy (2020) Impact of goodwill on firms’ capital structure in developing countries. The Empirical Economics Letters, 19 (6). 563 - 569. ISSN 1681-8997 https://www.researchgate.net/publication/342734350
spellingShingle Thakur, Oli Ahad
Amin Noordin, Bany Ariffin
Tunde, Matemilola Bolaji
Razman, Ahmed
Satiawan, Doddy
Impact of goodwill on firms’ capital structure in developing countries
title Impact of goodwill on firms’ capital structure in developing countries
title_full Impact of goodwill on firms’ capital structure in developing countries
title_fullStr Impact of goodwill on firms’ capital structure in developing countries
title_full_unstemmed Impact of goodwill on firms’ capital structure in developing countries
title_short Impact of goodwill on firms’ capital structure in developing countries
title_sort impact of goodwill on firms capital structure in developing countries
url http://psasir.upm.edu.my/id/eprint/89284/1/DEBT.pdf
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AT tundematemilolabolaji impactofgoodwillonfirmscapitalstructureindevelopingcountries
AT razmanahmed impactofgoodwillonfirmscapitalstructureindevelopingcountries
AT satiawandoddy impactofgoodwillonfirmscapitalstructureindevelopingcountries