Growth opportunities

Conceptualizing relationship between external environment, firm capabilities, strategic responses and performance. External environment will be argued that it positively Influences performance. Other perspectives have posited that firm capabilities moderate the choice of strategic choice.

The objective of this research is to determine the impact of profitability, growth opportunities, risk, liquidity, firm size, leverage, taxation and audit type on dividend payout in order to increase understanding of the determinants of dividend payout within Pakistani corporate environment. To meet the objective of this research, five year financial data from 2009-2014 of listed pharmaceutical companies is used and analyzed to determine the impact of selected variables on dividend payout. Correlation analysis and backward multiple linear regression is applied on the data to determine the association between variables and the impact of selected independent variables on dividend payout. Findings reveal that audit type, liquidity, growth opportunities & profitability are the key determinants of dividend payout of pharmaceutical companies of PSX. 31.90% variation in dividend payout is caused by these variables. Other independent variables including taxation, risk, firm size and leverage insignificantly influence dividend payout decisions of pharmaceutical companies of PSX.

The retention of employees belonging to generation Y is a problematic issue. Therefore, this paper aims to investigate how compensation package, working environment, growth opportunities and frequent feedback affect the retention of generation Y employees. The questionnaire used in the study was adapted from the previous literature. The sample size for the study was 250 and the questionnaire was administered to respondents from selected business organizations. The results indicate that working environment, growth opportunities and frequent feedback tend to enhance the retention of generation Y employees. However, no significant association was found between compensation package and the retention of generation Y employees. The findings of the study need to be carefully analyzed in view of its limitations. The data was gathered from a small sample of business organizations operating in Karachi, Pakistan and selected variables were used. Future studies may investigate the retention of generation Y employees by evaluating a larger sample of business organizations in Pakistan.

We study whether the corporate growth opportunities result in an asymmetric effect of the corporate financial leverage and the corporate dividend policies on the value of the firms from eleven East Asian countries: Hong Kong, Indonesia, India, Japan, South Korea, Sri Lanka, Malaysia, Philippines, Singapore, Thailand, and Taiwan. Our results corroborate the dual role of the corporate debt and the dividends. When firms lack growth opportunities, they alleviate the problem of overinvestment. But, when firms have growth opportunities, they exacerbate the problem of underinvestment. Our results also suggest that the legal and institutional environment can module this effect. Better legal protection of investors reduces the disciplinary role of financial decisions. According with the importance of capital markets, we find that debt and dividends are less influential in countries with more active capital markets. Finally, there are some firm-specific features, such as the nature of the controlling shareholders (e.g., the ownership concentration and the identity of these shareholders), which modify the relevance of debt and dividends in Asian firms.

Penelitian ini bertujuan untuk mendapatkan bukti empiris mengenai manajemen laba sebagai variabel dependen. Variabel independen penelitian ini terdiri dari 4 yaitu profitabilitas, ukuran perusahaan, ketidakpastian lingkungan, dan peluang pertumbuhan.  Sampel penelitian ini dipilih dengan metode purposive sampling dan data sekunder dianalisa dengan menggunakan metode regresi linear berganda. Sampel dalam penelitian ini sebanyak 43 perusahaan pada sektor properti, real estate, dan konstruksi bangunan yang terdaftar di Bursa Efek Indonesia (BEI) secara berturutturut selama tahun 2016-2018, menerbitkan laporan keuangan perusahaan yang berakhir per 31 Desember dengan mata uang rupiah secara berturut-turut selama tahun 2016-2018, menerbitkan laporan keuangan yang telah diaudit oleh auditor independen secara berturut-turut selama tahun 2016-2018, mengalami laba positif secara berturut-turut selama tahun 2016-2018, serta tidak melakukan stock split atau reverse stock selama tahun 2016-2018.  Hasil penelitian ini adalah (1) Profitabilitas berpengaruh positif signifikan terhadap manajemen laba, (2) Ukuran perusahaan tidak berpengaruh positif terhadap manajemen laba, (3) Ketidakpastian lingkungan tidak berpengaruh positif terhadap manajemen laba, (4) Peluang pertumbuhan tidak berpengaruh negatif terhadap manajemen laba, (5) Profitabilitas, ukuran perusahaan, ketidakpastian lingkungan, dan peluang pertumbuhan secara simultan berpengaruh signifikan terhadap manajemen laba.

Securities exchanges have greater roles to play in regard to economic and social development in both developed and developing economies. Hence, this paper examined the influence of firm financial characteristics on the leverage of manufacturing listed companies in Nairobi securities exchange. Panel data was collected from annual financial statements and panel regression modelling was adopted to analyze the data. Operating cash flows had a significant moderating effect on the influence of firm financial characteristics on the leverage of manufacturing listed firms in Nairobi securities exchange.

This study examines the firm characteristics that affect growth opportunities of Thai listed firms in the Stock Exchange of Thailand (SET) of 2005-2014. The firms' growth opportunities in the emerging market are important as those firms need more capital to raise future investment; however, the evidence on determinants of future growth remains unclear, particularly in Thai setting. The research results suggest that growth opportunities decline if Thai firms pay more cash as dividend, supporting the free cash flow hypothesis. In addition, when firm size becomes large the decision making on investment takes longer and hence decreased growth opportunities. The findings further show current profitability as a simple indicator of future growth in Thailand, in that the more the operating incomes, the higher the growth opportunities.

This study analyses whether the effect of corporate diversification on a firm's market value depends on how this strategy is implemented. According to the real options approach, two opposite diversification strategies may be implemented: one based on fully exercising available options (assets-in-place diversification) and the other aimed at seeding new opportunities for future growth in multiple businesses (growth options diversification). We propose an index to measure these two diversification patterns and we explore their impact on firm market value for a sample of U.S. firms during 1998–2014. We find that as a firm's diversification strategy shifts towards a growth options pattern, it becomes a more value-enhancing strategy.

Objective: This study explores the impact of seasoned equity offering (SEO) on financial reporting quality (FRQ), using free cash flow and growth opportunities, considering the cost of capital. Financial reporting quality is a potential factor in reducing information asymmetry between managers and shareholders of the companies.
Method: We used two samples of the companies listed in the Tehran Stock Exchange from 2001 to 2018. The principal sample consists of the companies that had seasoned equity offerings, and the parallel sample consists of the companies that are in the same industry and did not have SEO. The principal sample consists of 1543 company-year observations, and the parallel sample consists of 1938 company-year observations. We used two methods to calculate growth opportunities, the market-to-book value ratio, and Hyland and Diltz (2002) method. Free cash flow (FCF) was estimated using the Richardson (2006) method. To examine the role of cost of capital,  we used the five-factor model of Fama and French (2015). Financial reporting quality was estimated using the methods of Dechow and Dichev (2002) and McNichols (2002). To test the hypotheses, we estimated multivariate linear regressions using the findings of Dechow and Dichev (2002), Doyle et al. (2007), and Huang et al. (2012) and the portfolio formation approach.
Results: Given that there are various measurements of  financial reporting quality and there is no universally accepted way of the measurement of financial reporting quality, the results showed that the companies with high free cash flow and low growth opportunities and those with low free cash flow and high growth opportunities increase their financial reporting quality when seasoned equity offering. The companies with higher cost of capital have higher financial reporting quality compared with those with lower cost of capital, and when seasoned equity offering, the companies with lower cost of capital increase their financial reporting quality. The results also showed that while the companies without capital raising have high free cash flow and low growth opportunities, they have low financial reporting quality, and while the companies have low free cash flow and high growth opportunities, they have high financial reporting quality.
Conclusion: Companies that accept seasoned equity offerings increase the quality of their financial reporting to attract more funding and succeed in underwriting new stocks.

Listed and non-listed institutions are always in need of finances geared towards enhancing their firm performance which has a pivotal role in the relationship they will enjoy internally and externally. The ability of an organization to invest borrowed capital on projects with a higher return on investment has a significant impact on shareholders wealth maximization. Panel regression modelling revealed the positive influence of firm size and profitability and inverse influence of tangibility and growth opportunities on the leverage of listed non-financial companies in Nairobi securities exchanges.

Considering the importance of firm growth and the factors that influence it, the present study investigates the effect of financial factors on the growth of listed companies in the Tehran Stock Exchange in the period 2015 to 2018, and the book value to market value ratio used as a growth indicator of the companies. The statistical sample of this research is 433 companies listed on the stock exchange from 2015 to 2018. By the systematic elimination, only 82 companies were identified as eligible for our sample. Before analyzing the data, the variables' reliability tests and Chau and Hausman's tests were performed to determine the appropriate model for estimating the parameters and the effect of the independent variables on the dependent variable. Then, the panel data model with the fixed effects is used to test the hypotheses. As the results of the study show, there is a significant and direct relationship between cash flow, profitability, market share, industry sales, and financial leverage with companies' growth opportunities. Also, there is no significant relationship between the age and size of the companies and their growth opportunities.

Cognition and awareness of the firms' capital structure is important for potential shareholders and investors, and information on capital structure is used by creditors. The financing decisions of many firms depend on the market value of the stock. firms are issued when stocks are high and when they are redeemed when stocks are low, the reason for this action is obtaining more finance. The purpose of this study is to examine the effect of market past values on investment decisions and Cumulative leverage changes of firms from the perspective of market timing theory.In this study, using financial information of 134 companies listed on Tehran Stock Exchange over the period of 2012-2018 and using generalized least square (GLS) regression analysis, the market timing theory was tested with growth opportunities and leverage changes of companies. Results of the study suggest that in a 95% certainty level, the first hypothesis was confirmed i.e. past market values have positive and significant impact on investment decisions. Also, the second hypothesis was confirmed i.e. past market values have negative and significant impact on Cumulative leverage changes. These observations confirm the market timing theory, that is, companies’ growth opportunities are controlled via the  ratio, and leverage has a negative relationship with the  ratio. Also variables of ratio of fixed assets and size of company have a significant and negative impact on investment decisions, while profitability, leverage, market value to liquidity ratio and liquidity have positive and significant effect on investment decisions. Finally, profitability and the ratio of total liabilities to total assets have a significant negative effect on the cumulative leverage changes.

It is implicit in a research that in today’s environment, small and medium-sized enterprises (SMEs) that start with a global strategy can move quickly to take advantage of cross-border activities, which provide opportunities for not only revenue growth but also the exchange of knowledge and the enhancement of capabilities, which strengthen the long-term competitiveness of the firm. Though, the changing business environment creates new opportunities and incentives for SMEs to internationalize, it also confronts domestic firms with the threat of international competition, networking issues, policy and regulation matters, financial constraints etc. Internationalization has become increasingly important to the competitiveness of enterprises of all sizes. SMEs are increasingly facing numerous obstacles in the process of internationalization of business and it is perceive that SMEs need to respond on these changes for strategic improvement. This not only implies adjusting their domestic strategy, but increasingly forces firms to go abroad. This particular research tries to explore that factors which influence the internationalization process of SMEs in India.

"Abstract: Based on the linear decomposition of a firm's beta on the betas of its growth options and its Assets in Place, we propose a feedback algorithm to estimate the latter. Our proposal is founded on the existence of risk classes defined by a specific level of systematic risk for current business and growth opportunities. We test our model on a sample of US firms over the period 1994-2007, by identifying risk classes with industry groups as defined by Fama-French's 48-segment classification (Fama and French, 1997). Our results confirm rapid convergence of estimated parameters, and values which are quite consistent with the real option approach predictions. Our model addresses a practical problem which is yet to be resolved and is crucial for valuing firms and capital budgeting decisions. Empirical results are encouraging and shed new light on the problem of estimating the cost of capital.

Keywords: real options, growth opportunities, beta estimation, cost of capital, valuation
JEL Classifications: G12, G31 "