scholarly journals Is Bankruptcy Risk Tied to Corporate Life-Cycle? Evidence from Pakistan

2019 ◽  
Vol 11 (3) ◽  
pp. 678 ◽  
Author(s):  
Ahsan Akbar ◽  
Minhas Akbar ◽  
Wenjin Tang ◽  
Muhammad Qureshi
Keyword(s):  
Life Cycle ◽  
Mixed Model ◽  
Linear Mixed Model ◽  
Life Cycle Stage ◽  
Mature Stage ◽  
Bankruptcy Risk ◽  
Listed Firms ◽  
Firm Life Cycle ◽  
Corporate Life Cycle ◽  
The Relationship

In this paper we analyze the relationship between bankruptcy risk and the corporate life cycle in Pakistan from 2005 to 2014. For this purpose, we run a Hierarchical Linear Mixed Model (HLM) for a sample of 301 non-financial listed firms in 12 different sectors. The empirical outcomes reveal that firms during introduction, growth and, decline stages (mature stage) of life-cycle experience higher (lower) bankruptcy risk. Moreover, in juxtaposition with growth stage, bankruptcy risk is higher at the introduction stage of life-cycle. These findings suggest that financial managers should be cautious about the financial fragility of the firm at each stage of corporate life-cycle. The results also entail that Pakistani firms do not follow a sequential pattern in their life-cycle, rather they have the tendency to revert to a previous stage or jump to the next stage of life-cycle. This is the first study that empirically examines the association between firm life-cycle stage and corresponding bankruptcy risk and asserts that managers must incorporate the life-cycle effects into their financial planning and decision making for the sustainable working of an enterprise.

scholarly journals Is Bankruptcy Risk Tied to Corporate Life-Cycle? Evidence from Pakistan

2019 ◽  
Author(s):  
Ahsan Akbar ◽  
Minhas Akbar ◽  
Wenjin Tang ◽  
Muhammad Azeem Qureshi
Keyword(s):  
Life Cycle ◽  
Mixed Model ◽  
Linear Mixed Model ◽  
Life Cycle Stage ◽  
Mature Stage ◽  
Bankruptcy Risk ◽  
Listed Firms ◽  
Firm Life Cycle ◽  
Corporate Life Cycle ◽  
The Relationship

In this paper we analyze the relationship between bankruptcy risk and the corporate life cycle in Pakistan from 2005 to 2014. For this purpose, we run a Hierarchical Linear Mixed Model (HLM) for a sample of 301 non-financial listed firms in 12 different sectors. The empirical outcomes reveal that firms during introduction, growth and, decline stages (mature stage) of life-cycle experience higher (lower) bankruptcy risk. Moreover, in juxtaposition with growth stage, bankruptcy risk is higher at the introduction stage of life-cycle. These findings suggest that financial managers should be cautious about the financial fragility of the firm at each stage of corporate life-cycle. The results also entail that Pakistani firms do not follow a sequential pattern in their life-cycle rather they have the tendency to revert to a previous stage or jump to the next stage of life-cycle. This is the first study that empirically examines the association between firm life-cycle stage and corresponding bankruptcy risk and asserts that managers must incorporate the life-cycle effects into their financial planning and decision making for sustainable working of an enterprise.

scholarly journals Unraveling the Bankruptcy Risk‒Return Paradox across the Corporate Life Cycle

2020 ◽  
Vol 12 (9) ◽  
pp. 3547 ◽  
Author(s):  
Minhas Akbar ◽  
Ahsan Akbar ◽  
Petra Maresova ◽  
Minghui Yang ◽  
Hafiz Muhammad Arshad
Keyword(s):  
Life Cycle ◽  
Risk Taking ◽  
Mixed Model ◽  
Linear Mixed Model ◽  
Mature Stage ◽  
Financial Sustainability ◽  
Risk Averse ◽  
Bankruptcy Risk ◽  
Risk Return ◽  
Corporate Life Cycle

Bankruptcy risk is a fundamental factor affecting the financial sustainability and smooth functioning of an enterprise. The corporate bankruptcy risk‒return association is well founded in the literature. However, there is a dearth of empirical research on how this association prevails at different stages of the corporate life cycle. The present study aims to investigate the bankruptcy‒risk relationship at different stages of corporate life cycle by employing Hierarchical Linear Mixed Model (HLMM) regression estimation on the data of listed non-financial Pakistani firms from 12 diverse industrial segments. We grouped the firms into introduction, growth, mature, shake-out, and decline stages of the life cycle using Dickinson’s model. Empirical results assert that corporate risk-taking at the introduction stage yields superior financial performance in the future, while risk at the growth stage positively contributes to a firm’s current performance. Moreover, because of risk-averse and non-diversified managerial behavior, bankruptcy risk at the mature stage is negatively associated with both current and future performance. Likewise, risk-taking at the decline stage has significant negative implications for firm performance as the managers of such firms undertake heavy investments in a turnaround attempt; however, owing to the risk-averse behavior, they may indulge in negative net present value (NPV) projects. The study findings imply that managers synchronize a firm’s risk exposure with the corresponding life cycle stage to avoid going bankrupt. Moreover, excessive risk-taking during the mature and decline stages can considerably harm the financial sustainability of an enterprise. Hence, investors should exercise a degree of caution when investing in highly indebted later-stage (mature and decline) firms. Overall, bankruptcy risk‒return resembles an inverted U-shaped relationship. Our results are robust and can apply to various econometric specifications.

scholarly journals Sentiments–Risk Relationship across the Corporate Life Cycle: Evidence from an Emerging Market

Economies ◽  
2021 ◽  
Vol 9 (3) ◽  
pp. 111
Author(s):  
Minhas Akbar ◽  
Ahsan Akbar ◽  
Muhammad Azeem Qureshi ◽  
Petra Poulova
Keyword(s):  
Life Cycle ◽  
Risk Taking ◽  
Emerging Market ◽  
Generalized Method Of Moments ◽  
Life Cycle Stage ◽  
Risk Propensity ◽  
Bankruptcy Risk ◽  
Growth Firms ◽  
Corporate Life Cycle ◽  
Investment Portfolios

The influence of market sentiments on the bankruptcy risk propensity of firms has been extensively explored in the literature. However, less attention has been paid to whether the corporate life cycle plays any role in this nexus. The purpose of this research is to unveil how the corporate bankruptcy risk propensity responds to market sentiments, and whether this sentiments–risk relationship varies over different stages of the corporate life cycle. Using a sample of 301 Pakistani non-financial listed firms for 2005–2014, we employ two-step generalized method of moments (GMM) regression estimation to address the issue of endogeneity. Empirical evidence reveals that managers tend to escalate a firm’s bankruptcy risk during high market sentiments. Further analysis indicates that during the period of positive market sentiments, introduction stage firms prefer to assume the highest bankruptcy risk followed by decline and growth firms, while mature firms continue to be risk-averse. This research contributes to the corporate finance literature by suggesting that managerial risk-taking is influenced by market sentiments and corporate managers show a different attitude towards risk at different stages of the corporate life cycle. Therefore, to ensure enterprise sustainability, capital market regulators should have a robust risk management framework in place to discipline the excessive risk-taking by firm managers over different stages of the corporate life cycle. Moreover, investors and creditors shall take into consideration the respective life cycle stage of the firm to minimize the risk exposure of their investment portfolios. Our results are robust to alternate econometric specifications and alternate variable specifications.

scholarly journals Does the life cycle affect earnings management and bankruptcy?

2021 ◽  
Vol 12 (2) ◽  
pp. 425-461
Author(s):  
Pavol Durana ◽  
Lucia Michalkova ◽  
Andrej Privara ◽  
Josef Marousek ◽  
Milos Tumpach
Keyword(s):  
Life Cycle ◽  
Earnings Management ◽  
Financial Performance ◽  
Financial Management ◽  
Mixed Model ◽  
Value Added ◽  
Bankruptcy Risk ◽  
Corporate Life Cycle ◽  
The Impact

Research background: Deteriorating economic conditions and a negative outlook increase the pressure on financial management and the need to show high financial performance. According to Positive Accounting Theory, the growing risk of bankruptcy is associated with the phenomenon of earnings management. Bankruptcy risk and the quality of reported profits, along with other aspects of financial performance, vary throughout the company's life cycle. Nevertheless, these factors or their interactions are investigated only to a very small extent. Purpose of the article: The aim of this study is to clarify the impact of corporate life cycle and bankruptcy on earnings management, in order to describe behaviour of companies at different stages of corporate life cycle. Methods: A hierarchical mixed model with a random time and industry effect was chosen as appropriate because it allows the investigation of multilevel data that is not independent. The sample covers the financial indicators of more than 33,000 Central European companies from 2015?2019. The non-sequential Dickinson model, company age, and three models of accrual earnings management were used as proxies for the company's life cycle and quality of reported profit. Findings & value added: Earnings management and bankruptcy risk have a U-shape, indicating that financially distressed firms reduce reported accounting profit at the Introduction, Decline and, to a lesser extent, at the Growth stage. Slovak and Czech companies manipulate profits to a similar extent, Hungarian companies increase accounting profit to a greatest extent than the surveyed countries by controlling bankruptcy ? life cycle effect; however, the variability of accounting manipulations across industries has not been demonstrated. These findings imply that start-ups and declining businesses provide crooked financial statements to obtain more favourable debt covenants, and estimating discretionary accruals using life-cycle subsamples can improve the predictive power of accrual earnings management models.

scholarly journals Usefulness of Linear Mixed-Effects Models to Assess the Relationship between Objective and Subjective Internal Load in Team Sports

2021 ◽  
Vol 18 (2) ◽  
pp. 392
Author(s):  
Alice Iannaccone ◽  
Daniele Conte ◽  
Cristina Cortis ◽  
Andrea Fusco
Keyword(s):  
Heart Rate ◽  
Perceived Exertion ◽  
Mixed Model ◽  
Linear Mixed Model ◽  
Team Sports ◽  
Rating Of Perceived Exertion ◽  
Subjective Measures ◽  
Internal Load ◽  
Random Slopes ◽  
The Relationship

Internal load can be objectively measured by heart rate-based models, such as Edwards’ summated heart rate zones, or subjectively by session rating of perceived exertion. The relationship between internal loads assessed via heart rate-based models and session rating of perceived exertion is usually studied through simple correlations, although the Linear Mixed Model could represent a more appropriate statistical procedure to deal with intrasubject variability. This study aimed to compare conventional correlations and the Linear Mixed Model to assess the relationships between objective and subjective measures of internal load in team sports. Thirteen male youth beach handball players (15.9 ± 0.3 years) were monitored (14 training sessions; 7 official matches). Correlation coefficients were used to correlate the objective and subjective internal load. The Linear Mixed Model was used to model the relationship between objective and subjective measures of internal load data by considering each player individual response as random effect. Random intercepts were used and then random slopes were added. The likelihood-ratio test was used to compare statistical models. The correlation coefficient for the overall relationship between the objective and subjective internal data was very large (r = 0.74; ρ = 0.78). The Linear Mixed Model using both random slopes and random intercepts better explained (p < 0.001) the relationship between internal load measures. Researchers are encouraged to apply the Linear Mixed Models rather than correlation to analyze internal load relationships in team sports since it allows for the consideration of the individuality of players.

Size-related boldness is not altered by stomach flushing in a terrestrial salamander

2021 ◽  
pp. 1-6
Author(s):  
Sebastiano Salvidio ◽  
Andrea Costa ◽  
Fabrizio Oneto
Keyword(s):  
Body Condition ◽  
Mixed Model ◽  
Linear Mixed Model ◽  
Animal Personality ◽  
Model Analysis ◽  
Mixed Model Analysis ◽  
Linear Mixed Model Analysis ◽  
Before And After ◽  
Trophic Strategy ◽  
The Relationship

Abstract Animal personality is a relatively neglected field in amphibian research. In this study we assessed the influence of stomach flushing, a non-lethal technique used in amphibian dietary studies, on the boldness behaviour of the cave salamander Speleomantes strinatii. The time of emergence from a shelter located in an unfamiliar environment (a proxy for individual boldness) was measured in 26 cave salamanders before and after stomach flushing, while 14 non-flushed salamanders were tested as controls. Boldness was a repeatable behaviour for salamanders and larger individuals emerged from their shelter more rapidly than smaller ones. Linear mixed model analysis showed that flushing, sex and body condition had no effect on this behaviour. These findings are promising in the framework of the study of salamander personality. In particular, our results will be useful when exploring the relationship between individual trophic strategy and boldness, aggression or exploration behaviours in terrestrial salamanders.

Financial flexibility, managerial efficiency and firm life cycle on firm performance

2019 ◽  
Vol 16 (2) ◽  
pp. 168-180
Author(s):  
Heng-Yu Chang ◽  
Chun-Ai Ma
Keyword(s):  
Life Cycle ◽  
Firm Performance ◽  
Stock Market ◽  
Life Cycles ◽  
Mature Stage ◽  
Chinese Stock Market ◽  
Financial Flexibility ◽  
Content Type ◽  
Listed Firms ◽  
Managerial Efficiency

Purpose As the capital market in China is still developing, several constraints on a Chinese-listed firm’s financing strategy have a direct impact on its financial flexibility. The purpose of this paper is to reconstruct traditional financial flexibility index (FFI) derived from the western context, provide empirical evidence within eastern context by modified FFI and examine how the managerial efficiency of Chinese-listed firms is demonstrated with modified FFI to escort corporate life cycle hypothesis. Design/methodology/approach By tailored FFI to fit the contemporary operations of Chinese-listed firms, this study investigates how managerial efficiency varies across different life stages to demonstrate the moderating power in the firm performance of financially flexible firm. Findings It is found that financially flexible firms in the Chinese stock market generally experience good firm performance, yet the managerial efficiency could gradually be diminishing at their mature stage even firms’ financial flexibility remains consistent with the agency theory. This paper sheds light on the necessity to reexamine the components in financial flexibility based on the eastern context, and provides avenue to further understand the managerial behavior of Chinese listed firms when considering firm life cycles. Research limitations/implications Although it is difficult for this current study to offer the precise weights on each factor in calculating financial flexibility, the judgment matrix method is adopted to at least provide reliable estimates in accordance with Chinese business contexts with less than 10 percent errors in contrast to the actual weights. Practical implications This modified FFI is particularly suitable for Chinese-listed firms under certain unique financial reporting regulations by adjusting a number of weights and factors. This study may help practitioners understand the managerial conduct of publicly listed firms in China. Originality/value The paper constructs a modified FFI with Chinese stock market characteristics embedded, and provides insightful evidence to explain the new pecking order theory by considering the life cycle stage of Chinese-listed companies.

scholarly journals Thalamic white matter macrostructure and subnuclei volumes in Parkinson’s disease depression

2022 ◽  
Vol 8 (1) ◽  
Author(s):  
R. Bhome ◽  
A. Zarkali ◽  
G. E. C. Thomas ◽  
J. E. Iglesias ◽  
J. H. Cole ◽  
...  
Keyword(s):  
Parkinson’S Disease ◽  
Parkinson's Disease ◽  
White Matter ◽  
Mixed Model ◽  
Linear Mixed Model ◽  
Neural Structure ◽  
Generalised Linear Mixed Model ◽  
Antidepressant Use ◽  
The Relationship

AbstractDepression is a common non-motor feature of Parkinson’s disease (PD) which confers significant morbidity and is challenging to treat. The thalamus is a key component in the basal ganglia-thalamocortical network critical to the pathogenesis of PD and depression but the precise thalamic subnuclei involved in PD depression have not been identified. We performed structural and diffusion-weighted imaging (DWI) on 76 participants with PD to evaluate the relationship between PD depression and grey and white matter thalamic subnuclear changes. We used a thalamic segmentation method to divide the thalamus into its 50 constituent subnuclei (25 each hemisphere). Fixel-based analysis was used to calculate mean fibre cross-section (FC) for white matter tracts connected to each subnucleus. We assessed volume and FC at baseline and 14–20 months follow-up. A generalised linear mixed model was used to evaluate the relationship between depression, subnuclei volume and mean FC for each thalamic subnucleus. We found that depression scores in PD were associated with lower right pulvinar anterior (PuA) subnucleus volume. Antidepressant use was associated with higher right PuA volume suggesting a possible protective effect of treatment. After follow-up, depression scores were associated with reduced white matter tract macrostructure across almost all tracts connected to thalamic subnuclei. In conclusion, our work implicates the right PuA as a relevant neural structure in PD depression and future work should evaluate its potential as a therapeutic target for PD depression.

scholarly journals The Interplay between Working Capital Management and a Firm’s Financial Performance across the Corporate Life Cycle

2020 ◽  
Vol 12 (4) ◽  
pp. 1661 ◽  
Author(s):  
Zanxin Wang ◽  
Minhas Akbar ◽  
Ahsan Akbar
Keyword(s):  
Life Cycle ◽  
Firm Performance ◽  
Financial Performance ◽  
Life Cycle Stage ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Conservative Strategy ◽  
Corporate Life Cycle ◽  
The Impact

The purpose of this study is to examine the impact of working capital management (WCM) and working capital strategy (WCS) on firm’s financial performance across different stages of the corporate life cycle (CLC). We use Pakistani non-financial listed firms nested in 12 diverse industries over a period of 2005–2014 as the research sample and employ the hierarchical linear mixed (HLM) estimator, which can process multilevel data where observations are not completely independent. The empirical findings reveal that, overall, WCM is negatively associated with firm performance. However, this association is not static across different stages of a firm’s life cycle. For example, a negative association is more pronounced at the introduction stage followed by growth and decline stages, whereas WCM does not significantly impact the performance of mature firms. Likewise, WCS also causes varying effects on the financial performance across the CLC. A conservative strategy at the introduction, growth, and decline stages negatively affects firm performance, suggesting that these firms should adopt an aggressive strategy. Nevertheless, management of sample firms did not account for the respective life cycle stage while formulating a WCM strategy, which can seriously compromise their financial sustainability. These findings suggest that firms require customized WCM policies and WCS to attain sustainable financial performance at each stage of firm life cycle. Thus, managers should not overlook the significant role of CLC stages in their financial planning to ensure the sustainable functioning of the enterprise.

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