Ownership Structure, Financial Discipline, and Value Creation in MENA Leveraged Buyouts| Chapter 3 | New Advances in Business, Management and Economics Vol. 12

 

Leveraged Buyouts (LBOs) and Management Buyouts (MBOs) have garnered increasing interest since the late 1980s, characterised by the acquisition of firms primarily financed through debt. LBOs act as a distinctive external control mechanism. By acquiring firms predominantly through debt financing, LBOs impose financial discipline by limiting managerial discretion over free cash flows, as a substantial portion is allocated to servicing debt obligations. While LBOs are well-documented in developed markets, their applicability and effectiveness in emerging economies, particularly the MENA region, remain insufficiently explored. The primary objective of the study is to explore the impact of ownership structure on the financial performance of Leveraged Buyout (LBO) transactions in the MENA region, a key emerging market region. Drawing on agency theory by Jensen & Meckling and the capital structure theory of Modigliani and Miller, the study investigates how different shareholder configurations, particularly managerial equity participation, influence LBO outcomes. The data for this study were sourced from the CAPITALIQ and Crunchbase platforms, complemented by financial reports published by the target companies. Based on a sample of 233 transactions conducted between 2000 and 2023, the research adopts a quantitative methodology grounded in a hypothetico-deductive approach. The analysis focuses on the interactions between managerial ownership, leverage, target firm size, and operational performance. The descriptive statistics for the variables Management Buyout (MBO), Indebtness, EBITDA/Enterprise Value (EV), Size, and Multiple, derived from a sample of 211 leveraged buyout (LBO) transactions, provide a comprehensive overview of the financial and operational characteristics of the studied firms, shedding light on their post-LBO value creation dynamics. The findings support the agency theory premise that managerial ownership aligns interests and enhances performance, showing a positive relationship between managerial equity stakes and financial outcomes. Conversely, the effect of leverage, central to Modigliani and Miller’s propositions, proves more nuanced, reflecting the region’s unique financial constraints and market imperfections. Firm size, meanwhile, shows no direct correlation with performance improvement. These insights underscore the complex mechanisms behind LBO success in the MENA context and offer practical and theoretical implications, particularly regarding governance practices and institutional frameworks. The study also highlights avenues for future research, including a deeper examination of regional governance dynamics and the moderating role of institutional factors—such as investor protection, financial market maturity, and political stability—to better understand the conditions driving LBO success across different national contexts.

 

 

Author(s) Details

Abir Attahiri
Research Laboratory in Finance, Accounting, Management, and Decision Support Information Systems (LEFCG-SIAD), National School of Business and Management of Settat, Hassan First University of Settat, Settat, 26002, Morocco.

 

Maroua Zineelabidine
Laboratory of Researches in Management and Organizational Sciences, National School of Business and Management, Ibn Tofail University, Kenitra, Morocco.

 

Mohamed Amine FADALI
Laboratory of Studies and Research in Management Science (LERSG), FSJES-Agdal-Mohammed V University, Rabat, 10090, Morocco.

 

Mohamed Makhroute
Research Laboratory in Finance, Accounting, Management, and Decision Support Information Systems (LEFCG-SIAD), National School of Business and Management of Settat, Hassan First University of Settat, Settat, 26002, Morocco.

 

 

Please see the book here :- https://doi.org/10.9734/bpi/nabme/v12/6747

Capital Structure and Financial Performance of Commercial Banks in Ghana | Chapter 2 | Business, Management and Economics - Research Progress Vol. 1

 

This paper investigates the impact of capital structure on the financial performance of commercial banks in Ghana for the period, 2008-2022. The methodology involves a robust analytical framework using econometric models, particularly the Panel Autoregressive Distributed Lag (P-ARDL) regression model enabling a thorough examination of the complex interactions between capital structure and bank performance. Spanning five listed banks over a 15-year period for which consistent data is available, panel-data econometric modelling was used to accommodate individual heterogeneity. The findings reveal a significant long-run positive impact of capital structure on financial performance, suggesting that optimal capital structure can enhance bank performance in the long run. In the short run, capital structure contemporaneously and sluggishly impacts ROA negatively, but with only a weak negative sluggish effect on ROE. The results further highlight the significant long-run detrimental effect of bank size and the robust positive long-run effect of bank growth on the financial performance of banks. The paper recommends a strategic focus on optimising capital structure to enhance the long-run financial performance of Ghanaian commercial banks thereby underscoring the importance of considering internal factors in capital structure decisions. This study contributes to the global discourse on capital structure, offering fresh perspectives from an underdeveloped economic context.

 

Author(s) Details

 

Deodat E. Adenutsi
Department of Accounting and Finance, HTU Business School, Ho Technical University, Ho, Ghana.

 

Please see the link:- https://doi.org/10.9734/bpi/bmerp/v1/880

Study on the Influence of Commercial Inducements towards Monetary Growth of Listed Companies at the Colombo Stock Exchange | Chapter 1 | Contemporary Research in Business, Management and Economics Vol. 5

In the context of improving financial performance of companies throughout the world, commercial incentives provided to finance managers with respect to enhanced employee performance are of paramount importance. Commercial incentives is able to align employee goals with organizational objectives, inspire employees, encourage development, and offer constructive feedback. However, this paper is based on the findings of the publicly listed companies at the Colombo stock exchange. This paper aims to ascertain the adequacy and the level of commercial inducements of finance managers required to enhance the monetary growth of publicly listed companies in Sri Lanka. For the purpose of investigation, a quantitative study with the use of the deductive method, using a stratified random sampling technique consisting of a sample of 200 Public Listed Companies out of a population of 306 was used. Both primary data sourced through questionnaires from the representative sample of the population and secondary data available in the annual reports of listed firms within the last 5 years were used to conduct multiple correlation and regression analyses. In the analysis of multiple correlations between corporate inducements and financial performance, salary, share options, allowances, fringe benefits, bonuses and overtime were considered to ascertain the relationship with ROA, ROE, ROCE, GPM and NPM.
 
The obtained results were relatively according to the literature developed in the study as expounded by Fredrick Herzberg under Two Factor Theory and also by Alderfer under ERG theory. The results indicated corporate incentives have a strong effect on financial performance and a strong relationship between corporate incentives and with financial performance of listed firms. Corporate incentives in the context of factors of motivation were more effective than hygiene factors as explained by Herzberg and also by Alderfer which the theoretical framework was based upon in this study.
 
This study recommended that publicly listed companies in the Colombo Stock Exchange should focus on intrinsic corporate incentives (factors of motivation) as emphasized by Herzberg than extrinsic corporate incentives (hygiene factors). This study implied that Human Resource practitioners, theorists, researchers and remuneration policymakers to consider the requisite level of corporate incentives to formulate remuneration policies and procedures to mitigate, avoid and prevent discrepancies in incentive anomalies to motivate finance managers to gain successful financial growth.

Author(s) Details:

De Livera, M. S. S.,
Faculty of Management Studies and Commerce, University of Sri Jayewardenepura, Sri Lanka.

Please see the link here: https://stm.bookpi.org/CRBME-V5/article/view/14180

An Empirical Study Evaluating the Role of Capital Structure on Financial Performance and Sustainability of Microfinance Institutions (MFIs) in Ghana | Chapter 2 | Contemporary Research in Business, Management and Economics Vol. 1

In Ghana, MFIs have risen to prominence as crucial lending institutions in the development process as they offer financial services to the poor. Microfinance is defined as the provision of savings and loans to low-income clients. The study examines the effect of capital structure on the financial performance and sustainability of Microfinance Institutions in Ghana. We investigate the role of debt-to-equity ratio, equity-to-asset ratio, and deposit-to-loan ratio in guaranteeing financial performance and sustainability. Secondary data was collected from the MFIs licensed by the Bank of Ghana. We implement multiple regression methods to investigate the relationship between the observed performance indicators and a set of explanatory variables. The empirical analysis involves 51 Ghanaian MFIs reporting on the MIX market. We find strong empirical support for the notion that asset size is significantly and positively related to asset returns, self-sufficiency, and financial sustainability. Additionally, capital structure variables are strongly associated with profitability but exert insignificant impacts on the operational self-sufficiency and financial instability of MFIs. The macroeconomic environment also matters to the profitability, self-sufficiency, and sustainability of MFIs. The ability of the MFIs to improve security and lessen the risk is critical in ensuring profit efficiency and self-sufficiency. A stable macroeconomic environment is essential to enhancing the financial performance and sustainability of MFIs.

Author(s) Details:

Rowland Seyram Koku Dabi,
Faculty of Finance and Economics Education, School of Management Studies, Universitas Pendidikan Indonesia (UPI), Bandung, Indonesia.

Nugraha,
Faculty of Management, Financial Management, Universitas Pendidikan Indonesia (UPI), Bandung, Indonesia.

Disman,
Management Science, Public Finance, Economics and Finance Banking Universitas Pendidikan Indonesia (UPI), Bandung, Indonesia.

Maya Sari,
Faculty of Economics and Business Education, Universitas Pendidikan Indonesia (UPI), Bandung, Indonesia.

Please see the link here: https://stm.bookpi.org/CRBME-V1/article/view/13487

The Effects of Entrepreneurial Values and Entrepreneurial Orientation on the Financial Performance: An Empirical Evidence from Indonesian State-Owned Enterprises | Chapter 2 | Current Aspects in Business, Economics and Finance Vol. 10

 The present study focuses on the effect of Entrepreneurial Values and Entrepreneurial Orientation on the Financial Performance of Indonesian State-Owned Enterprises, and it further contains Environmental Dynamism (ED) and Resource Availability (RA) as arbitrating variables. The study more develops understanding of the impact of Financial Performance on Intention to Sustainable Development (ITS) and Financial Performance on Intention to Collaborate (ITC) in Indonesian state-possessed adventures. The PLS-SEM methods was secondhand in this place study, in addition to the beneficial inspecting order. The part of reasoning is all united states of america-possessed activities filed that exists of 81 in another direction 106 state-possessed undertakings, while the part of note is things from those state-possessed undertakings (depicted for one mated CEO and CFO the one are introduced from the unchanging guest). The association of the evidence in this place study is that the management needs to deal with cautiously some supplementary state-capital partnership in SOEs so as not to generate comfort district and making firms likely to drop commercial punishment and extend to non-center projects that have an impact of lowering their progressive adjustment that grant permission decrease the economic efficiency.

Author(s) Details:

Sandiaga Salahuddin Uno,
Graduate School of Management, Universitas Pelita Harapan, Jakarta, Indonesia.

Hendrawan Supratikno,
Graduate School of Management, Universitas Pelita Harapan, Jakarta, Indonesia.

Gracia Shinta S. Ugut,
Graduate School of Management, Universitas Pelita Harapan, Jakarta, Indonesia.

Innocentius Bernarto,
Graduate School of Management, Universitas Pelita Harapan, Jakarta, Indonesia.

Ferdi Antonio,
Graduate School of Management, Universitas Pelita Harapan, Jakarta, Indonesia.

Yudistira Hasbullah,
Graduate School of Management, Universitas Pelita Harapan, Jakarta, Indonesia.

Please see the link here: https://stm.bookpi.org/CABEF-V10/article/view/9632

Managing Workforce Diversity in Supply Chain Integration for Improved Business Performance | Chapter 7 | New Innovations in Economics, Business and Management Vol. 3

 With the rise of globalisation, workforce diversity management has become a strategic priority. Businesses are increasingly under pressure to hire employees from a variety of origins and cultures as a survival strategy rather than as a cost-cutting measure. The importance of diverse workforce management in achieving enhanced business performance in such contexts cannot be overstated. "Is it really worth managing a diverse workforce?" is the critical issue that new studies must answer. This study investigates the impact of managed-workforce diversity (MWD) on internal supply chain (SC) integration and business performance in part to answer this question. The information was gathered mostly through surveys from 126 respondents. To validate the study instrument and the data obtained, LISREL 8.5 was used to conduct a thorough statistical analysis that included ANOVA, exploratory factor analysis (EFA), confirmatory factor analysis (CFA), and the Structural Equation Model (SEM). MWD is useful in improving internal SC integration and SC responsiveness, which improves business performance; and SC integration works as a conduit via which MWD effects business performance, according to this study. As a result, we argue that effective workforce diversity management (i.e., creating a positive affective climate in which employees do not feel intimidated, looked down upon, or discriminated against because of differences in their backgrounds) is a critical strategy for boosting business performance through internal SC integration and responsiveness. We further contend that, while each focal business in the supply chain network may profit from managing its varied workforce on its own, aligning such initiatives or efforts with those of members in either stream may be helpful for a more comprehensive SC integration. In the following sections, the management ramifications and theoretical importance of the study's findings are examined in depth.

Author(S) Details

Samuel Bruce Rockson
Department of Purchasing and Supply, Cape Coast Technical University, Cape Coast, Ghana.

Jonathan Annan
Department of Supply Chain and Information Systems, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana.

Abdul Samed Muntaka
Department of Supply Chain and Information Systems, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana.

View Book:- https://stm.bookpi.org/NIEBM-V3/article/view/5098

Compliance with Regulations: Critical Path to Adequate Corporate Governance in the Banking Industry for Business Sustainability and Improved Financial Performance (A Nigeria Case Scenario) | Chapter 3 | Modern Perspectives in Economics, Business and Management Vol. 6

 Compliance with rules remained a major roadblock in the worldwide financial business, particularly in the Nigerian banking industry. Corporate governance is required, yet regulation compliance is a conundrum in the banking business, which has had an impact on investors and financial performance due to fines and penalties imposed by regulators. Regardless, compliance challenges are worldwide, and the Nigerian financial sector requires increased regulatory action to ensure that the provisions of law are properly understood and implemented. As a result, in the current global market, compliance is the only language that can protect the financial industry from future collapse owing to the corporate financial leader's attitude toward their firm and corporate governance regulations. The goal of this qualitative exploratory multiple case research was to find out what compliance measures corporate financial leaders should put in place to ensure that regulations are followed in order to increase business sustainability and financial performance. The banking industry is one of the economy's pillars; yet, average depositors in Nigeria feared the bank because of the banks' frequent failures. As a result, compliance is the only language in the current global market that can prevent the financial industry from future collapse due to corporate finance leaders' attitudes toward their firm and corporate governance requirements. The purpose of this qualitative exploratory multiple case study was to determine what compliance procedures corporate financial leaders should implement in order to ensure that regulations are obeyed in order to improve business sustainability and financial performance. Despite the fact that the banking industry is one of the economy's pillars, common depositors in Nigeria have a dread of banks due to their numerous failures. Utilizing member checking and triangulation, data was transcribed, processed, and validated. Before the data collection could begin, the participant had to sign an informed consent form. Compliance in the Nigerian banking industry is improving, according to the findings. However, until 2021, there will be concerns of noncompliance and conflicts of interest, which will damage bank financial performance in the long run and may lead to financial hardship, according to Agency theory as the conceptual framework. The insights could be used by authorities to better their oversight. monitoring strategy and guarding ambiguity in rules to ensure that corporate financial leaders are complying with all aspects of corporate governance codes and their execution in accordance with best practises globally, not just the part of the code that they are comfortable with. The findings may be used by corporate financial leaders to curtail strategies that could bring their business to a halt, and to imbibe the spirit of the code to ensure that the company adhered to regulations for long-term sustainability, as well as to improve the company's financial performance in order to attract potential investors. The findings might be used by the regulator to prevent the banking industry from collapsing by being proactive rather than reactive to a crisis.

Author (S) Details

Akande Oyebola Bejide
College of Management and Technology, Walden University, Minneapolis, USA.

View Book :- https://stm.bookpi.org/MPEBM-V6/article/view/3405