Threshold capital structure and predictors of choice between distribution strategies

Orientation: The determination of a threshold capital structure and company specific attributes as predictors of choice between distribution strategies is crucial in the creation of shareholders’ wealth. Research aim: To investigate whether the change in regimes given a threshold capital structure...

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Autores principales:	Mpinda F. Mvita, Leon M. Brummer, Hendrik P. Wolmarans
Formato:	article
Lenguaje:	EN
Publicado:	AOSIS 2021
Materias:	threshold capital structure predictors of choice distribution strategy south african context generalised structural equation Economics as a science HB71-74
Acceso en línea:	https://doaj.org/article/10be796ab5974948b60f350a8b12fc3f
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spelling	oai:doaj.org-article:10be796ab5974948b60f350a8b12fc3f2021-11-24T07:41:16ZThreshold capital structure and predictors of choice between distribution strategies1995-70762312-280310.4102/jef.v14i1.679https://doaj.org/article/10be796ab5974948b60f350a8b12fc3f2021-10-01T00:00:00Zhttps://jefjournal.org.za/index.php/jef/article/view/679https://doaj.org/toc/1995-7076https://doaj.org/toc/2312-2803Orientation: The determination of a threshold capital structure and company specific attributes as predictors of choice between distribution strategies is crucial in the creation of shareholders’ wealth. Research aim: To investigate whether the change in regimes given a threshold capital structure maximises distribution strategies over the period 1990–2017 and 1999–2017. In addition, the study examined how the capital ratio and company specific attributes were used in the process of choosing between distribution strategies. Motivation for the study: The need to determine the impact of the capital ratio within different regions on distribution strategies motivated this study. In addition, the majority of studies on predictors of choice between distribution strategies have ignored the dual and the no distribution policy alternatives relative to share repurchases. Research approach/design and method: all the data used in this research were sourced from the Iress data bases. The research employed an advanced panel threshold regression estimation and a multinomial logistic regression (pooled and fixed effects using the generalised structural equation model). Main findings: Firstly, over the period 1990–2017 the empirical results revealed the existence of a single threshold effect between the debt-to-equity ratio and the dividend payments, and a double threshold effect between the total debt based on the book value and the dividend payment. Secondly, the choice between distribution strategies was driven by company specific attributes. Practical/managerial implication: These findings provide useful insights to South African managers for formulating and maximizing pay-out decisions. Contribution/value-add: The study contributes to the scant body of knowledge on the effect of threshold capital ratio and company specific attributes on distribution strategies.Mpinda F. MvitaLeon M. BrummerHendrik P. WolmaransAOSISarticlethreshold capital structurepredictors of choicedistribution strategysouth african contextgeneralised structural equationEconomics as a scienceHB71-74ENJournal of Economic and Financial Sciences, Vol 14, Iss 1, Pp e1-e14 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	threshold capital structure predictors of choice distribution strategy south african context generalised structural equation Economics as a science HB71-74
spellingShingle	threshold capital structure predictors of choice distribution strategy south african context generalised structural equation Economics as a science HB71-74 Mpinda F. Mvita Leon M. Brummer Hendrik P. Wolmarans Threshold capital structure and predictors of choice between distribution strategies
description	Orientation: The determination of a threshold capital structure and company specific attributes as predictors of choice between distribution strategies is crucial in the creation of shareholders’ wealth. Research aim: To investigate whether the change in regimes given a threshold capital structure maximises distribution strategies over the period 1990–2017 and 1999–2017. In addition, the study examined how the capital ratio and company specific attributes were used in the process of choosing between distribution strategies. Motivation for the study: The need to determine the impact of the capital ratio within different regions on distribution strategies motivated this study. In addition, the majority of studies on predictors of choice between distribution strategies have ignored the dual and the no distribution policy alternatives relative to share repurchases. Research approach/design and method: all the data used in this research were sourced from the Iress data bases. The research employed an advanced panel threshold regression estimation and a multinomial logistic regression (pooled and fixed effects using the generalised structural equation model). Main findings: Firstly, over the period 1990–2017 the empirical results revealed the existence of a single threshold effect between the debt-to-equity ratio and the dividend payments, and a double threshold effect between the total debt based on the book value and the dividend payment. Secondly, the choice between distribution strategies was driven by company specific attributes. Practical/managerial implication: These findings provide useful insights to South African managers for formulating and maximizing pay-out decisions. Contribution/value-add: The study contributes to the scant body of knowledge on the effect of threshold capital ratio and company specific attributes on distribution strategies.
format	article
author	Mpinda F. Mvita Leon M. Brummer Hendrik P. Wolmarans
author_facet	Mpinda F. Mvita Leon M. Brummer Hendrik P. Wolmarans
author_sort	Mpinda F. Mvita
title	Threshold capital structure and predictors of choice between distribution strategies
title_short	Threshold capital structure and predictors of choice between distribution strategies
title_full	Threshold capital structure and predictors of choice between distribution strategies
title_fullStr	Threshold capital structure and predictors of choice between distribution strategies
title_full_unstemmed	Threshold capital structure and predictors of choice between distribution strategies
title_sort	threshold capital structure and predictors of choice between distribution strategies
publisher	AOSIS
publishDate	2021
url	https://doaj.org/article/10be796ab5974948b60f350a8b12fc3f
work_keys_str_mv	AT mpindafmvita thresholdcapitalstructureandpredictorsofchoicebetweendistributionstrategies AT leonmbrummer thresholdcapitalstructureandpredictorsofchoicebetweendistributionstrategies AT hendrikpwolmarans thresholdcapitalstructureandpredictorsofchoicebetweendistributionstrategies
_version_	1718415899177779200

Threshold capital structure and predictors of choice between distribution strategies

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