Impact of Operational Efficiency and Financial Performance on Capital Structure using Earnings Management as a Moderator Variable | ||||
| الفکر المحاسبى | ||||
| Article 22, Volume 24, Issue 3, October 2020, Page 1029-1059 PDF (571.36 K) | ||||
| Document Type: المقالة الأصلية | ||||
| DOI: 10.21608/atasu.2020.160431 | ||||
 View on SCiNiTO | ||||
| Authors | ||||
| Mohamed Hassan Abd-Elmageed1; Nevine Sobhy Abdel Megeid2 | ||||
| 1Faculty of Commerce - Ain Shams University | ||||
| 2College of Management and Technology Arab Academy for Science, Technology and Maritime Transport | ||||
| Abstract | ||||
| This research aims to investigate the association between operational efficiency and financial performance of the company on capital structure which is indicated in terms of the relative balance of the company financing sources using the earning management as a moderator variable in the process of management decision making regarding the enhancing the balance of the firm capital structure. We use a sample of 65 listed non-financial companies in the Egyptian Stock Exchange (EGX) during the 7 years (2013-2019). Three panel models for estimating the three multiple linear panel regression equations used in this research to test the impact of operational efficiency, ROA, ROE, gross profit margin, current ratio, asset turnover, inventory turnover, Tobin’s Q ratio and firm size on capital structure using the earnings management as a moderator variable. Findings indicate that ROE, gross profit margin and firm size have a positive significant impact on company’ capital structure, while operational efficiency, ROA, Tobin’s Q ratio and all liquidity ratios used in the first regression model (current ratio, asset turnover and inventory turnover) have a significant negative relationship with capital structure. Moreover, findings indicate that the firm’ operational efficiency, gross profit margin and Tobin’s Q ratio have a positive significant impact on company’ earnings management, while ROA, ROE and all liquidity ratios used in the second regression model (current ratio, asset turnover and inventory turnover) have a significant negative relationship with earnings management. Finally, the statistical results shows that all the variables used in the third regression model namely, earnings management, Tobin’s Q ratio and firm size have a significant negative relationship with the capital structure of the firm. | ||||
| Keywords | ||||
| Operating Efficiency; Financial Performance; Capital Structure; Earnings Management; Egypt | ||||
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