International Journal of Financial Studies (Oct 2022)

Inappropriate Corporate Strategies: Latin American Companies That Increase Their Value by Short-Term Liabilities

  • Jorge Feregrino,
  • Juan Felipe Espinosa-Cristia,
  • Nelson Lay,
  • Luis Leyton

DOI
https://doi.org/10.3390/ijfs10040100
Journal volume & issue
Vol. 10, no. 4
p. 100

Abstract

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This study seeks to understand the financing strategy used by companies listed on the Mexican Stock Exchange (BVM), the São Paulo Stock Exchange (VVSP), and the Santiago Stock Exchange (BCS). To this end, the data observed in the Economática database for a sample of 29 companies were considered. Then, through a long panel data model, the study concludes that in the organizations reviewed, there is a degree of association between the variables “short-term liabilities” and “share price”, as the former increases by 1%, and the value of the shares increases by 0.09% in the subsequent period. This confirms a procyclical financial leverage.

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