Jul 2026· International Journal of Financial Studies· Vol 14, pp. 196· 0 citations· 65 references
Abstract
This study examines the moderating role of liquidity in the relationship between extreme capital structure and firm performance among listed firms in emerging markets. It is motivated by the need to better understand how financing constraints and liquidity management influence firm performance in environments characterised by high financial frictions and limited access to external capital. Extreme capital structure is defined as firms maintaining very low levels of debt, measured using thresholds of 1% (ultra-low debt) and 5% for both long-term debt and total debt. The analysis is based on a panel dataset of non-financial listed firms over the period 2006–2024 and employs a dynamic panel System Generalised Method of Moments (System GMM) complemented by a Random Effects model for robustness. Empirical results indicate that liquidity has a meaningful and predominantly positive moderating effect. This is observed when firms maintain extremely low long-term debt (1% threshold) and low long-term debt (5% threshold). Liquidity enhances firm performance. This effect is strongest for return on assets (ROA) and return on equity (ROE). The effect on Tobin’s Q is weaker but remains generally positive. These findings highlight the strategic importance of liquidity in improving profitability and financial resilience under conservative financing structures. However, the findings are limited to listed non-financial firms in emerging markets and may not be generalizable to SMEs or unlisted firms. Future research could explore the threshold at which liquidity ceases to generate benefits or begins to produce diminishing returns in ultra-low leverage contexts.
How the maturity structure of corporate debt shapes firms’ capacity to withstand financial pressure remains understudied, particularly in bank-dependent emerging markets. This study examines whether greater reliance on short-term debt weakens firms’ ability to absorb financial shocks. Using quarterly panel data for non-financial listed firms on the Vietnamese stock market from 2015 to 2025, we construct an accounting-based measure of financial resilience (FR), defined as the ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to the sum of short-term debt and interest expense, and measure debt maturity structure (DMS) as the proportion of short-term debt in total interest-bearing debt. Firm fixed-effects models with quarterly time fixed effects and firm-clustered standard errors are used to estimate the relationship. The results consistently show that firms with a higher proportion of short-term interest-bearing debt exhibit significantly lower financial resilience across all model specifications. This negative relationship remains robust after controlling for alternative measures of financial leverage and using a logarithmic transformation of the dependent variable. The findings highlight the importance of debt maturity management as a key component of corporate financing strategy for firms and policymakers seeking to enhance financial resilience.
N. T. Duyen, Le Quoc Diem, Nguyen Thao Hoa· Journal of Risk and Financia...· 0 citations
This study explores the moderating effect of agency costs on the relationship between capital
structure and firm value in listed manufacturing firms in Nigeria. The relationship between
capital structure and firm value has long been a topic of interest in corporate finance, with
capital structure decisions influencing firm performance and value. The main objective of this
research is to examine how agency costs, particularly audit fees, and moderate the effect of long
term and short-term debt on the value of these firms. Using secondary data from 120 listed
manufacturing companies, this study employs an ex post facto research design and a fixed effects
model to analyze the relationships. The findings indicate that both long-term and short-term debt
have a significant positive impact on firm value, measured by Tobin’s Q. Moreover, audit fees
were found to significantly moderate the relationship between capital structure and firm value,
suggesting that firms with higher debt levels and greater financial complexity experience more
pronounced effects on their firm value. These results are consistent with the agency theory,
which emphasizes that high debt levels, when coupled with complex financial structures, lead to
higher agency costs but may also enhance firm value if managed properly. The study
recommends that firms carefully balance their debt levels to avoid financial distress while
leveraging the benefits of tax shields. Policymakers should also consider strengthening
regulatory frameworks to ensure that firms with complex capital structures are adequately
monitored. Future research could examine the relationship between debt, agency costs, and firm
value across different industries or regulatory environments to deepen the understanding of
these dynamics.
Onoja Emanuel Enenche· Journal of Accounting and Fi...· 0 citations
We examine the determinants of capital structure for S&P 500 firms over the recent 25 years from 2000 to 2024. Using both traditional regression models and machine-learning approaches, we investigate how firm fundamentals and macroeconomic conditions jointly shape firms’ leverage decisions. Across several empirical methods, including OLS, Lasso, Ridge, Random Forest, and Gradient Boosting, we find that operating profitability, tax-shield benefits, and earnings volatility consistently emerge as the most important determinants of leverage. Firms with higher profitability rely less on external financing, while tax incentives or greater internal cash flow uncertainty can result in the use of more debt. Nonlinear models further highlight liquidity as an important predictor, suggesting that internal cashflow buffers reduce reliance on external financing. At the macro level, GDP growth is negatively associated with leverage, consistent with firms deleveraging during economic expansions. Overall, our findings suggest that firm-specific characteristics play a dominant role in shaping capital structure decisions, while macroeconomic conditions exert a secondary but meaningful influence.
C. N. V. Krishnan, Yue Lang· Journal of finance issues· 0 citations
This study aims to investigate the firm-level determinants of natural resource efficiency (NRE) in non-financial firms, offering novel insights grounded in the Natural Resource-Based View (NRBV) and stakeholder theory.
Using 2,489 firm-year observations from 206 DSE-listed companies over the period 2001–2021, this study uses Ordinary Least Square, Feasible Generalized Least Squares and system Generalized Method of Moments estimations to address issues of unobserved heterogeneity and potential endogeneity.
The analysis reveals that firm-specific factors such as size, operational efficiency, liquidity and leverage significantly influence NRE. Larger and more efficient firms tend to manage natural resources more effectively, while high leverage and older firm age are linked to reduced efficiency, suggesting that financial pressure and institutional inertia may hinder sustainable practices. Governance attributes exhibit mixed effects: board meeting frequency is positively associated with NRE, indicating the importance of active oversight, whereas board size and diversity show negative associations, suggesting potential coordination challenges. Subsample analyses across firm sizes and industries highlight substantial heterogeneity in these relationships, indicating that resource efficiency strategies must be tailored to organizational and sectoral contexts.
The findings of this study offer practical implications for regulators, policymakers and firms aiming to enhance sustainability through targeted interventions that prioritize operational efficiency, financial resilience and board-level diversity to improve NRE.
This study contributes to the literature by introducing a quantifiable firm-level measure of NRE, conducting robust cross-sectional analyses and emphasizing the strategic role of governance in enhancing environmental performance.
M. Karim, Shobod Deba Nath, Gourav Roy et al.· Corporate Governance : The i...· 0 citations
This research examines the effect of capital structure and profitability on firm value, with liquidity as a moderating variable, among food and beverage (F&B) manufacturing companies listed on the Indonesia Stock Exchange during the 2020–2024 period. The research is motivated by inconsistent findings in previous studies and the unique financial conditions faced by the F&B sector following the COVID-19 pandemic, including supply chain disruptions, inflationary pressures, and changing consumer behavior. A quantitative approach was employed using secondary data from annual reports, 208 panel observations were analyzed through panel data regression and Moderated Regression Analysis (MRA), with model selection via Chow, Hausman, and Lagrange Multiplier tests. The findings reveal that capital structure has a significant negative effect on firm value, indicating that excessive leverage reduces market valuation. Profitability also demonstrates a significant negative effect on firm value, reflecting investor concerns regarding earnings sustainability during post-pandemic recovery. Liquidity has a significant negative direct effect on firm value, suggesting that excessive current assets may be perceived as inefficient resource utilization. However, liquidity significantly strengthens the relationship between capital structure and firm value, as well as between profitability and firm value, confirming its strategic moderating role in translating financial decisions into market value. This study contributes to corporate finance literature by providing empirical evidence on the moderating role of liquidity in the Indonesian F&B industry during the post-pandemic period and offers practical implications for managers and investors in optimizing financial policies.
Unknown authors· Jurnal Indonesia Sosial Sain...· 0 citations
Purpose: This study investigates the direct effect of non-cash working-capital liquidity on corporate cash holdings and evaluates whether firm size acts as a moderating variable within the liquidity-intensive property and real estate sector listed on the Indonesia Stock Exchange.Research Methodology: A quantitative explanatory approach using panel data was conducted on 42 property and real estate firms (252 firm-year observations) listed from 2018 to 2023. Data were analyzed using regression analysis by EViews 12 software.Results: Statistical findings demonstrate that liquidity has a significant negative direct effect on cash holdings. Importantly, firm size significantly moderates the relationship between liquidity and cash holding in a positive direction, confirming its role as a pure moderator that attenuates liquidity substitution behavior.Conclusions: Organizational scale fundamentally alters corporate liquidity management; while smaller firms substitute non-cash liquidity for physical cash, larger enterprises leverage superior credit access and scale advantages to accumulate internal liquid reserves alongside working capital growth.Limitations: The scope is limited strictly to audited financial disclosures of property and real estate companies in a single emerging market over a six-year period, unobserving qualitative governance factors.Contributions: The study provides financial managers with insights to optimize cash conversion cycles and offers Investors and Regulators (Otoritas Jasa Keuangan-OJK) a diagnostic scale-adjusted framework for evaluating corporate liquidity risk
