Year: 2015
Type: article
Abstract: The relationship between financial leverage and firm performance is studied in this paper. Financial leverage can positively influence firm performance because leverage can be treated as a tool for disciplining management. The results for a large sample of Russian joint-stock companies over the period 2004-2013 years show, however, that the impact of financial leverage on Russian firms’ performance has been negative. The findings are robust to using different measures of firm performance, checking sub-samples and time clusters and employing alternative estimation approach. The results thus support pecking-order theory but are not consistent with trade-off or free-cash-flow theories.
Author: Евгений Валерьевич Илюхин
Institution: Ulyanovsk State Technical University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W3124313033