Browsing by Author "Baranov, Oleksandr"

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    Capital Structure in Financial Distress: A Comprehensive Study across Industries and Borders
    (2019-07-02) Baranov, Oleksandr; Hedencrona, Henrik; University of Gothenburg/Graduate School; Göteborgs universitet/Graduate School
    This paper examines the effects of financial distress on the relationships between capital structure and its determinants – continuing on the famous research by Rajan and Zingales from 1995. The sample contains balance sheet information for 3743 non-financial firms over a period of 14 years, classified into NAICS sectors and distributed across the G7 countries. Results reveal that financial stress (i) puts downwards pressure on the positive relationship between capital structure and tangible assets, (ii) causes a substantial shift in the negative link between capital structure and profitability, so much so that it be-comes strongly positive, (iii) has an ambiguous effect on the relationship between capital structure and investment opportunities, putting upwards pressure when measured at book leverage and downwards pressure when measured at market leverage, (iv) has weak impact on the relationship between capital structure and tangible assets in countries and sectors with high tangibility, (v) has strong impact on the relationship between capital structure and company size in countries and sectors with large firms, and (vi) has weak impact on the relationship between capital structure and profitability in countries and sectors with high profit margin.
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    Industry Classification and The Relationship between Profitability and Competition: A Study of The US Manufacturing Industry
    (2019-09-25) Baranov, Oleksandr; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik
    This paper examines how the relationship between profitability and competition changes with narrowing industry classification⁠—and what implications that carries for policy makers and future antitrust laws. The sample is comprised of panel data for 1178 US manufacturing firms between 2002 and 2012, covering approximately 26% of the total market capitalization and 19% of all public businesses in the US for 2012. Four measures of competition are used to cover and cross-validate the research question; the number of firms, market share, market concentration and the Herfindahl-Hirschman index. Results offer weak evidence that (i) profitability decreases with competition, and (ii) explanatory power between firm profitability and market competition increases with narrowing industry classification. Additionally, profitability is shown to increase with lagged profitability, firm growth and productivity, and decrease with leverage and financial stress.