Does Economic Freedom moderate the relationship between Profitability and Capital Structure?

Detalhes bibliográficos
Autor(a) principal: Gomes Rocha Ferreira, Lucas Benedito
Data de Publicação: 2024
Outros Autores: Kroenke, Adriana
Tipo de documento: Artigo
Idioma: eng
por
Título da fonte: Contabilidade, Gestão e Governança
Texto Completo: https://revistacgg.org/index.php/contabil/article/view/3053
Resumo: Purpose: to analyze the effect of Economic Freedom on the relationship between Profitability and Capital Structure of companies in the Americas. Method: descriptive, documentary research was carried out with a quantitative approach through Hierarchical Linear Modeling. Secondary company data was taken from Refinitiv Eikon, while Economic Freedom information was collected from The Heritage Foundation. The relationships were verified considering the Pecking Order Theory and Trade-Off, and the countries were also analyzed according to the institutional variable of Economic Freedom. The research population consisted of countries in the Americas, which resulted in a final sample of 4,068 companies from 2014 to 2021. Originality/Relevance: the study shows that the Economic Freedom of countries can change companies' financing decisions. Results: Without considering Economic Freedom, there is a positive and significant relationship between Profitability and Capital Structure, as expected by the Trade-Off, indicating that the company is moving towards a defined target of a debt/value ratio. However, when recognizing the moderating effect of Economic Freedom, this relationship becomes negative, as the Pecking Order Theory presumes, since there are lower levels of debt for the most profitable companies. Contribution: indicates the importance of the government guaranteeing the Economic Freedom of individuals/entrepreneurs, to reduce barriers to trade, corruption, and financing, promoting political stability through governance and institutional indicators. Keywords: Capital Structure; Profitability; Economic Freedom; Pecking Order; Trade-Off.
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spelling Does Economic Freedom moderate the relationship between Profitability and Capital Structure?A Liberdade Econômica modera a relação entre o Desempenho Econômico e a Estrutura de Capital?Capital StructureProfitabilityEconomic FreedomPecking OrderTrade-OffEstrutura de CapitalDesempenhoLiberdade EconômicaPecking OrderTrade-OffPurpose: to analyze the effect of Economic Freedom on the relationship between Profitability and Capital Structure of companies in the Americas. Method: descriptive, documentary research was carried out with a quantitative approach through Hierarchical Linear Modeling. Secondary company data was taken from Refinitiv Eikon, while Economic Freedom information was collected from The Heritage Foundation. The relationships were verified considering the Pecking Order Theory and Trade-Off, and the countries were also analyzed according to the institutional variable of Economic Freedom. The research population consisted of countries in the Americas, which resulted in a final sample of 4,068 companies from 2014 to 2021. Originality/Relevance: the study shows that the Economic Freedom of countries can change companies' financing decisions. Results: Without considering Economic Freedom, there is a positive and significant relationship between Profitability and Capital Structure, as expected by the Trade-Off, indicating that the company is moving towards a defined target of a debt/value ratio. However, when recognizing the moderating effect of Economic Freedom, this relationship becomes negative, as the Pecking Order Theory presumes, since there are lower levels of debt for the most profitable companies. Contribution: indicates the importance of the government guaranteeing the Economic Freedom of individuals/entrepreneurs, to reduce barriers to trade, corruption, and financing, promoting political stability through governance and institutional indicators. Keywords: Capital Structure; Profitability; Economic Freedom; Pecking Order; Trade-Off.Objetivo: analisar o efeito da Liberdade Econômica na relação entre o Desempenho Econômico e a Estrutura de Capital das companhias das Américas. Método: realizou-se pesquisa descritiva, documental com uma abordagem quantitativa por meio da Modelagem Linear Hierárquica. Os dados secundários referentes às empresas foram extraídos da Refinitiv Eikon, enquanto as informações de Liberdade Econômica foram coletadas da The Heritage Foundation. As relações foram verificadas à luz da Pecking Order Theory e Trade-Off, sendo que os países foram analisados conforme variável institucional da Liberdade Econômica. A população da pesquisa foi composta por países das Américas, os quais resultam uma amostra final de 4.068 empresas no período de 2014 a 2021. Originalidade/Relevância: o estudo mostra que a Liberdade Econômica dos países pode alterar as decisões de financiamento das empresas. Resultados: sem considerar a Liberdade Econômica, há uma relação positiva e significativa entre o Desempenho Econômico e a Estrutura de Capital, conforme esperado pela Trade-Off, indicando que a empresa está se direcionando a uma meta definida de uma relação dívida/valor. Entretanto, ao reconhecer o efeito moderador da Liberdade Econômica, essa relação passa a ser negativa, como presume a Pecking Order Theory, já que há menores níveis de endividamento para as empresas mais rentáveis. Contribuição: indica a importância de o governo garantir a Liberdade Econômica dos indivíduos/empresários, de forma a diminuir as barreiras ao comércio, à corrupção e ao financiamento, promovendo uma estabilidade política por meio de indicadores de governança e institucionais. Palavras-chave: Estrutura de Capital; Desempenho; Liberdade Econômica; Pecking Order; Trade-Off.Contabilidade Gestão e Governança2024-02-15info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdfapplication/pdfhttps://revistacgg.org/index.php/contabil/article/view/305310.51341/cgg.v26i3.3053Journal of Accounting, Management and Governance; Vol. 26 No. 3 (2023); 345-377Contabilidade Gestão e Governança; v. 26 n. 3 (2023); 345-3771984-392510.51341/cgg.v26i3reponame:Contabilidade, Gestão e Governançainstname:Universidade de Brasília (UnB)instacron:UNBengporhttps://revistacgg.org/index.php/contabil/article/view/3053/814https://revistacgg.org/index.php/contabil/article/view/3053/815Copyright (c) 2023 Lucas Benedito Gomes Rocha Ferreira, Adriana Kroenkeinfo:eu-repo/semantics/openAccessGomes Rocha Ferreira, Lucas BeneditoKroenke, Adriana2024-02-16T12:38:45Zoai:oai.jamg.cloud:article/3053Revistahttp://www.revistacgg.org/index.php/contabilPUBhttps://revistacgg.org/index.php/contabil/oaijamg.cgg@gmail.com1516-70111984-3925opendoar:2024-02-16T12:38:45Contabilidade, Gestão e Governança - Universidade de Brasília (UnB)false
dc.title.none.fl_str_mv Does Economic Freedom moderate the relationship between Profitability and Capital Structure?
A Liberdade Econômica modera a relação entre o Desempenho Econômico e a Estrutura de Capital?
title Does Economic Freedom moderate the relationship between Profitability and Capital Structure?
spellingShingle Does Economic Freedom moderate the relationship between Profitability and Capital Structure?
Gomes Rocha Ferreira, Lucas Benedito
Capital Structure
Profitability
Economic Freedom
Pecking Order
Trade-Off
Estrutura de Capital
Desempenho
Liberdade Econômica
Pecking Order
Trade-Off
title_short Does Economic Freedom moderate the relationship between Profitability and Capital Structure?
title_full Does Economic Freedom moderate the relationship between Profitability and Capital Structure?
title_fullStr Does Economic Freedom moderate the relationship between Profitability and Capital Structure?
title_full_unstemmed Does Economic Freedom moderate the relationship between Profitability and Capital Structure?
title_sort Does Economic Freedom moderate the relationship between Profitability and Capital Structure?
author Gomes Rocha Ferreira, Lucas Benedito
author_facet Gomes Rocha Ferreira, Lucas Benedito
Kroenke, Adriana
author_role author
author2 Kroenke, Adriana
author2_role author
dc.contributor.author.fl_str_mv Gomes Rocha Ferreira, Lucas Benedito
Kroenke, Adriana
dc.subject.por.fl_str_mv Capital Structure
Profitability
Economic Freedom
Pecking Order
Trade-Off
Estrutura de Capital
Desempenho
Liberdade Econômica
Pecking Order
Trade-Off
topic Capital Structure
Profitability
Economic Freedom
Pecking Order
Trade-Off
Estrutura de Capital
Desempenho
Liberdade Econômica
Pecking Order
Trade-Off
description Purpose: to analyze the effect of Economic Freedom on the relationship between Profitability and Capital Structure of companies in the Americas. Method: descriptive, documentary research was carried out with a quantitative approach through Hierarchical Linear Modeling. Secondary company data was taken from Refinitiv Eikon, while Economic Freedom information was collected from The Heritage Foundation. The relationships were verified considering the Pecking Order Theory and Trade-Off, and the countries were also analyzed according to the institutional variable of Economic Freedom. The research population consisted of countries in the Americas, which resulted in a final sample of 4,068 companies from 2014 to 2021. Originality/Relevance: the study shows that the Economic Freedom of countries can change companies' financing decisions. Results: Without considering Economic Freedom, there is a positive and significant relationship between Profitability and Capital Structure, as expected by the Trade-Off, indicating that the company is moving towards a defined target of a debt/value ratio. However, when recognizing the moderating effect of Economic Freedom, this relationship becomes negative, as the Pecking Order Theory presumes, since there are lower levels of debt for the most profitable companies. Contribution: indicates the importance of the government guaranteeing the Economic Freedom of individuals/entrepreneurs, to reduce barriers to trade, corruption, and financing, promoting political stability through governance and institutional indicators. Keywords: Capital Structure; Profitability; Economic Freedom; Pecking Order; Trade-Off.
publishDate 2024
dc.date.none.fl_str_mv 2024-02-15
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv https://revistacgg.org/index.php/contabil/article/view/3053
10.51341/cgg.v26i3.3053
url https://revistacgg.org/index.php/contabil/article/view/3053
identifier_str_mv 10.51341/cgg.v26i3.3053
dc.language.iso.fl_str_mv eng
por
language eng
por
dc.relation.none.fl_str_mv https://revistacgg.org/index.php/contabil/article/view/3053/814
https://revistacgg.org/index.php/contabil/article/view/3053/815
dc.rights.driver.fl_str_mv Copyright (c) 2023 Lucas Benedito Gomes Rocha Ferreira, Adriana Kroenke
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Copyright (c) 2023 Lucas Benedito Gomes Rocha Ferreira, Adriana Kroenke
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv Contabilidade Gestão e Governança
publisher.none.fl_str_mv Contabilidade Gestão e Governança
dc.source.none.fl_str_mv Journal of Accounting, Management and Governance; Vol. 26 No. 3 (2023); 345-377
Contabilidade Gestão e Governança; v. 26 n. 3 (2023); 345-377
1984-3925
10.51341/cgg.v26i3
reponame:Contabilidade, Gestão e Governança
instname:Universidade de Brasília (UnB)
instacron:UNB
instname_str Universidade de Brasília (UnB)
instacron_str UNB
institution UNB
reponame_str Contabilidade, Gestão e Governança
collection Contabilidade, Gestão e Governança
repository.name.fl_str_mv Contabilidade, Gestão e Governança - Universidade de Brasília (UnB)
repository.mail.fl_str_mv jamg.cgg@gmail.com
_version_ 1798315266252210176

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