By using individual-level survey data from 97 countries, we investigate the effect of informal institutions on external financing and its impact entrepreneurship. We find that a culturally driven entrepreneurial environment allows entrepreneurs to obtain more debt, equity, venture capital financing, this, in turn, increases activities. further is critical determining entrepreneurship than formal institutional arrangements (such as investor protection). Our results provide evidence...

A growing number of studies in the past two decades suggest that social trust matters for financing. However, a few recent also indicate may result systemic biases and opportunistic behavior. First, we show is important several types entrepreneurial Second, our results reveal plays an essential role start-up financing places with low access to information, disclosures, weaker legal protection. countries stronger protections, effect either insignificant or negative. Hence, takes on substitute...

Purpose – The Gulf Cooperation Council (GCC) member countries have recently given tremendous emphasis to corporate entrepreneurship. purpose of this paper is investigate whether the lack entrepreneurship in publicly listed GCC firms affects their ability acquire debt financing. Design/methodology/approach Using stochastic frontier approach, estimates an optimal revenue function labor costs, operating expenses, and existing physical infrastructure organization. difference between actual level...

Purpose The purpose of this paper is to investigate the impact social capital non-resident family members on small business debt financing. Recent literature in entrepreneurship suggests that businesses can borrow improve their access Design/methodology/approach Micro-entrepreneurs from India were interviewed regarding ability raise as well relationship with banks and politicians. Findings survey indicates entrepreneurs are able Indians. Results also suggest these more likely be connected...

Purpose – The purpose of this paper is to examine the signaling and free cash flow hypotheses dividends in context an emerging financial market. Design/methodology/approach authors use fundamental information Chinese companies listed Shenzhen Shanghai stock exchanges. They impact dividend payments on future profitability individual firms with without controlling for non-linearity their earnings test hypothesis. also determine characteristics paying Findings It was found that while increases...

Abstract Using a sample of 56 countries over the 2000–2016 period, we document lower levels venture capital investments in more religious countries. These results are not specific to any primary religion. Furthermore, show that negative relation between religiosity and investing mainly stems from risk aversion inherent religiosity. Our unlikely driven by economic clout, as fact have higher domestic credit or nonfinancial investments, despite investments. We also present several findings...

Prior research has shown that credit downgrades affect firm's capital structure decision. However, after adjusting for biases associated with the use of market debt ratio and controlling simultaneity between ratings leverage, we find rating upgrades also play a role in firms' leverage. Contrary to previously reported findings, our evidence indicates effect on lasts more than just one year.

Purpose – The purpose of this paper is to determine whether corporate investment in real fixed assets hot issue markets leads higher income shareholders than that other equity market conditions. Design/methodology/approach authors address the research question two steps: first, identify how security issuances and cold influence decisions. Second, examine debt- equity-financed investments different conditions affect future holding period returns. sample includes an unbalanced panel data set...

Overwhelming evidence indicates that firms time market conditions to issue equity. I investigate the motivations for security issuances in hot and cold markets. While it is commonly believed tend exploit overvaluations equity overinvest so-called 'hot' markets, which often results lower future returns, show certain periods with adverse selection costs are motivated by fundamentals such as capital expenditures financial constraints, these can create shareholder wealth. In contrast, during of...

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The main objective of this article is to determine the relationship between time-varying social mood and trend corporate investment distortion. It rational for firms issue equities invest in fixed assets during periods hot markets when market-wide asymmetric information less severe. Such market years can be considered as optimistic mood. In contrast, cold viewed pessimistic results exhibit that investments rise (fall) above (below) firms' expected levels increased (decreased) Thus, with high...

This paper provides risk and information asymmetry-based explanations of the disappearing dividend puzzle first documented by Fama French (2001). Dividends serve as signaling device and, under models asymmetry, cost increases with volatility firms’ cash flows. Declining propensities to pay dividends imply that asymmetries have become lower and/or has increased. We find evidence consistent both. First, we abnormal returns associated initiations been declining over years. attribute this...

We find robust evidence that presence of state religions reduces entrepreneurial financing in a large cross section countries. Religious practices such as church attendance increases countries without religions, finding consistent with social capital and networking perspectives. However, the effect religious is largely insignificant. beliefs, on other hand, have weakly negative financing, regardless sample. The reduction state-sponsored likely comes from cultural environment associated religions.