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- Comparison of static models in optimization of the determinants of the Portuguese SME capital structurePublication . Lourenco, Antonio; Mata, Mário Nuno; Arsénio, TiagoPurpose: This research aims to study the determinants of Portuguese companies’ capital structure. These results can be useful: 1) as guidelines for capital structure optimization and 2) as a support for efficient decisions in what concerns to capital structure. The literature shows that classical determinants of capital structure present statistical significance and pursue the expected sign for different econometric models tested. Method: The study follows a quantitative design research, with data collected in Amadeus from 500 SME`S in Portugal. The data spans from 2009 to 2018 totaling 4500 observations. We consider three dependent variables, i.e., total, medium and long term and short-term debt. In addition, we also employ seven independent variables (dimension; growth; liquidity; profitability; tangibility; profitability and business risk and singularity). We used a panel data approach based on fixed effects (FE) and of random effects models (RE). Findings: We found that there is no significant divergence of the experimental results obtained in the OLS model, with the fixed effects model and the random effects model, and the expected signals for some independent variables are generally the hypotheses formulated. If we compared both econometric models, it is verified that regardless of the model used, or of the dependent variable analyzed, some of the independent variables are statistically significant in all analyzed models. Furthermore, we also found evidence that the same expected signals are in agreement with the standard financial theory. These empirical findings may suggest good indicators for making more efficient decisions about the determinants of the capital structure. Research limitations/implications: The main contribution of this work is mainly in which econometric models had best results (according to existing theories) to analyse capital structures of companies. We found that the econometric model chosen for the analysis of the variables must be analysed insofar as some of the independent variables are sensitive to the expected signal and statistical significance, depending on the selected model. Practical implications: These findings will be very useful to top managers in the process of deciding the optimal structure of capital without neglecting the long run financial sustainability of the companies. Originality/value: This study is different because go beyond the classical capital structure determinants and also shows a comparison between different econometric models.
- Debt market trends and predictors of specialization: an analysis of pakistani corporate sectorPublication . Khan, Kanwal Iqbal; Qadeer, Faisal; Mata, Mário Nuno; Dantas, Rui; Xavier Rita, João; Martins, Jessica NunesRecently, debt structure research has started focusing on the strategic perspective of financing choices, particularly to understand the reasons for debt specialization (DS). This paper examines trends of specialization over time and industry by using a comprehensive dataset on types of debt employed by the public limited companies during 2009–2018. The objective of the current study is to analyze the effect of debt market conditions by identifying significant predictors of DS. Time-series and cross-sectional results confirm the existence of DS, which is further validated by the findings of the cluster analysis. The empirical results indicate that overall, 61% of the companies solely rely on a single type of debt, mostly on short-term obligations accompanied by long-term secured and other debts. Moreover, small, mature, rated, group-affiliated, and low-leverage companies incline more towards this strategy. Credit rating, debt maturity, financial and interest coverage ratios serve as the primary determinants of the debt market that are significantly associated with the measures of DS. The results contribute to the capital structure literature by specifying that financing choice has an important implication in deciding the debt structure composition of the organizations.