Nikolaos Eriotis

How firm characteristics affect capital structure: an empirical study

Purpose - The aim of this study is to isolate the firm characteristics that affect capital structure. Design/methodology/approach - The investigation has been performed using panel data procedure for a sample of 129 Greek companies listed on the Athens Stock Exchange during 1997-2001. The number of the companies in the sample corresponds to the 63 per cent of the listed firms in 1996. The firm characteristics are analyzed as determinants of capital structure according to different explanatory theories. The hypothesis that is tested in this paper is that the debt ratio at time Findings - The findings of this study justify the hypothesis that there is a negative relation between the debt ratio of the firms and their growth, their quick ratio and their interest coverage ratio. Size appears to maintain a positive relation and according to the dummy variable there is a differentiation in the capital structure among the firms with a debt ratio greater than 50 per cent and those with a debt ratio lower than 50 per cent. These results are consistent with the theoretical background presented in the second section of the paper. Originality/value - This paper goes someway to proving that financial theory does provide some help in understanding how the chosen financing mix affects the firms value.

How Rewarding is Technical Analysis? Evidence from Athens Stock Exchange

The purpose of this paper is to investigate the performance of various technical trading rules in the Athens Stock Market. We test two of the simplest and most popular trading rules- Moving Averages and MACD Indicator. We evaluate how these simple forms of technical analysis can predict stock price movements in the Athens Stock Exchange. This study will investigate these effects for the most important index of the Athens market, the Athens General Index. Our study covers the period from 1/1/1990 to 31/12/2004. The methodologies employed include standard tests and bootstrap. Overall, our results provide strong support for the examined technical strategies.

Economic efficiency of Greek retail SMEs in a period of high fluctuations in economic activity: a DEA approach

This study aims to analyse the economic efficiency of Greek small and medium retail enterprises before and after the crisis that started in 2008. Based on the Accounting Equation, we use Data Envelopment Analysis (DEA) to estimate variable returns of scale efficiency scores and to conclude on specific characteristics that efficient companies have, for example, on capital structure. Our results from the DEA application show a high degree of inefficiency. We found that SMEs on the islands are more efficient than those on the mainland and that SMEs in the cities are the least efficient. Size seems to be important, more so on the islands and on the mainland than in the cities. We conclude that companies should act more conservatively in terms of operating cost when the first signs of a recession appear. In addition, during a recession period, companies that have evidences that their operations will continue positively should strengthen their operations by raising more own capital. Finally, our study clarifies four issues: the efficiency of retail companies in a period of growth and a period of recession, focusing on SMEs that operate in different regions, connecting Accounting Equation and DEA and adding acid ratio as an output in our model.

SMEs capital structure determinants during severe economic crisis: The case of Greece

Abstract The objective of this paper was to explore whether and how the main capital structure determinants of SMEs affected capital structure determination in different ways during the years of economic crisis. We used panel data of 8,052 SMEs operating in Greece during 2009–2012. We found that the effect of capital structure determinants on leverage does not change in an environment of economic crisis; larger SMEs continued to show higher debt ratios, the relationship between profitability and tangibility of assets with leverage continued to be negative, and growth was positively related to leverage.

Arithmetic Mean: A Bellwether for Unbiased Forecasting of Portfolio Performance

Purpose - We know that estimates of terminal value of long-term investment horizons are biased. Unbiased estimates exist only for investment horizon of one time-period. The purpose of this paper is to suggest a method based on the arithmetic mean in order to obtain unbiased estimates for the terminal value of long-term investment horizons. Design/methodology/approach - The method used for the investigation was to employ loss functions or error statistics. Namely, the mean error, the mean absolute error, the root mean squared error, and the mean absolute percentage error was used. Findings - The suggested method produced the closest values to the actual ones than any other suggested averaging method when the authors examined ten-year investment horizons for Standard & Poors 500 index and on Dow Jones Industrial index. Practical implications - Portfolio managers and individual investors may use this papers suggestion if they wish to obtain unbiased estimates for investment horizons greater than one time-period. Originality/value - The suggestion to equate the time-period of the observed data to the time-period of the investment horizons is novel and useful to practitioners since it produces unbiased estimates.

A requiem for the use of the geometric mean in evaluating portfolio performance

Although the geometric mean procedure is very popular among financial analysts, it is shown that when it is applied on rates of returns for evaluating portfolio performance it does not produce efficient results. Valuable past performance information is ignored since the geometric mean procedure applied on rates of returns uses only three specific pieces of information, namely the initial value, the terminal value and the total number of time periods under evaluation.

Delisted versus voluntary delisted versus remain listed: an ordered analysis

Public companies were classified according to whether they remain public or they have been delisted voluntarily or not. Proxy variables were separated according to accounting and/or market information and an ordered polytomous logit model was then applied in order to estimate the probability of delisting. Companies with poor liquidity, high leverage, big stock price decline and lack of interest from investors’ point of view (low trading activity) have higher probability to be delisted, voluntarily or not.

Capital structure and size: new evidence across the broad spectrum of SMEs

Purpose - – The purpose of this paper is to add to the existing literature by examining a number of hypotheses relating to the capital structure decision in relation to the firms’ size, namely by distinguishing among micro, small and medium firms. Design/methodology/approach - – The paper examines the hypothesis that the factors determining capital structure are different for firms belonging to different size groups. The authors use a panel data model capturing the dynamic concept of capital structure. Findings - – The authors find that whereas the size of the firm does affect how much debt a firm will issue, it does not influence the relationship between the other regressors and debt usage. Research limitations/implications - – The paper examines the small and medium enterprises (SMEs). Does not examine the large firms. Practical implications - – During the last decade there has been a gradually increasing interest shown in the field of SMEs. These enterprises represent important parts of all economies in terms of both their total number and their job offer and job creation. For example, in the European Union (EU), in 2005, SMEs accounted for 99.8 percent of the total number of enterprises operating in EU-27, covering 66.7 of total employment in the non-financial business economy sector. Social implications - – This paper relates capital structure decision to firms’ size distinguishing them among micro, small and medium firms. Originality/value - – The paper tests differences in capital structure determination among different size groups of enterprises in a dynamic framework for more than one year.

Delisted versus voluntary delisted versus remain listed: financial disclosure timing

ABSTRACT We focus in the period of announcement of accounting information for companies listed in an organized market and we re-examine their probability of delisting, voluntarily or not. Adopting the same framework, consideration is given to the assumption that investors utilize market information when accounting data are published. The analysis provided indicates that investors should pay attention to the financial disclosure timing. Our investigation demonstrated that even the short period of three months is quite important to making investment decisions.

Mergers' announcements and their impact on firm value in Athens stock-exchange market: an empirical analysis, 2000–2006

This paper aims to analyse the relation between the returns of companies that participate in mergers as well as the takeover ratios of output-value (Tobins qs) of each absorbing (henceforth Bidder) and each absorbed (henceforth Target) company for the period 2000–2006. The returns of Targets and Bidders, as well as the returns of the new companies that are created by the mergers (total returns), are bigger when Targets have low Tobins qs and simultaneously Bidders have high Tobins qs. This relation is also enhanced by the insertion of control variables. This study does not lie in agreement with the conclusions of Lang et al. as well as of Servaes.