Analyzing Company’s Internal and External Factors Influencing the Financing Model through Structural Equation Modeling (SEM)
This study aimed to identify the most effective financing model by analyzing the internal and external factors influencing companies. We compiled data from 159 companies spanning 2012 to 2021, encompassing 1,590 company-years, to test 14 hypotheses. These hypotheses were evaluated using Structural E...
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| Format: | Article |
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University of Isfahan
2024-12-01
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| Series: | Journal of Asset Management and Financing |
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| Online Access: | https://amf.ui.ac.ir/article_28697_ccff28bce6088d365183147862868a35.pdf |
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| author | Sajad Veisi Seyed Ali Vaez Ebrahim Anvari Esmaeel Mazaheri |
| author_facet | Sajad Veisi Seyed Ali Vaez Ebrahim Anvari Esmaeel Mazaheri |
| author_sort | Sajad Veisi |
| collection | DOAJ |
| description | This study aimed to identify the most effective financing model by analyzing the internal and external factors influencing companies. We compiled data from 159 companies spanning 2012 to 2021, encompassing 1,590 company-years, to test 14 hypotheses. These hypotheses were evaluated using Structural Equations Modeling (SEM) with SmartPLS4 software across 3 distinct models. The financing model was categorized into 3 components: internal financing, short-term external financing, and long-term external financing. The findings revealed that the following factors significantly impacted all three types of financing: 1) Board of Directors’ characteristics; 2) Audit characteristics; 3) Internal control characteristics; 4) Ownership structure; 5) Managerial characteristics; 6) Financial reporting quality; 7) Financial performance; 8) Market performance; 9) Investment efficiency; 10) Competitive strategies; 11) Corporate social responsibility; 12) Political communication; 13) Economic uncertainty; and 14) Firm characteristics. Notably, economic uncertainty was found to exert a negative and significant effect on financing across all three dimensions, while the other variables positively facilitated company financing. Furthermore, the analysis indicated that the selected structures had greater explanatory power for long-term financing compared to internal and short-term financing as evidenced by the determination coefficients of all three models. |
| format | Article |
| id | doaj-art-4dd2148e37084285b807b8a6255f5e39 |
| institution | Kabale University |
| issn | 2383-1189 |
| language | fas |
| publishDate | 2024-12-01 |
| publisher | University of Isfahan |
| record_format | Article |
| series | Journal of Asset Management and Financing |
| spelling | doaj-art-4dd2148e37084285b807b8a6255f5e392025-01-26T10:24:44ZfasUniversity of IsfahanJournal of Asset Management and Financing2383-11892024-12-011248712010.22108/amf.2024.140584.186128697Analyzing Company’s Internal and External Factors Influencing the Financing Model through Structural Equation Modeling (SEM)Sajad Veisi0Seyed Ali Vaez1Ebrahim Anvari2Esmaeel Mazaheri3Ph.D. Candidate, Department of Accounting, Faculty of Economic and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, IranAssociate Professor, Department of Accounting, Faculty of Economic and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, IranAssociate Professor, Department of Economics, Faculty of Economic and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, IranAssistant Professor, Department of Accounting, Faculty of Economic and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, IranThis study aimed to identify the most effective financing model by analyzing the internal and external factors influencing companies. We compiled data from 159 companies spanning 2012 to 2021, encompassing 1,590 company-years, to test 14 hypotheses. These hypotheses were evaluated using Structural Equations Modeling (SEM) with SmartPLS4 software across 3 distinct models. The financing model was categorized into 3 components: internal financing, short-term external financing, and long-term external financing. The findings revealed that the following factors significantly impacted all three types of financing: 1) Board of Directors’ characteristics; 2) Audit characteristics; 3) Internal control characteristics; 4) Ownership structure; 5) Managerial characteristics; 6) Financial reporting quality; 7) Financial performance; 8) Market performance; 9) Investment efficiency; 10) Competitive strategies; 11) Corporate social responsibility; 12) Political communication; 13) Economic uncertainty; and 14) Firm characteristics. Notably, economic uncertainty was found to exert a negative and significant effect on financing across all three dimensions, while the other variables positively facilitated company financing. Furthermore, the analysis indicated that the selected structures had greater explanatory power for long-term financing compared to internal and short-term financing as evidenced by the determination coefficients of all three models.https://amf.ui.ac.ir/article_28697_ccff28bce6088d365183147862868a35.pdfdevelopment of financing systemsinternal financingexternal financinginternal factorsexternal factors |
| spellingShingle | Sajad Veisi Seyed Ali Vaez Ebrahim Anvari Esmaeel Mazaheri Analyzing Company’s Internal and External Factors Influencing the Financing Model through Structural Equation Modeling (SEM) Journal of Asset Management and Financing development of financing systems internal financing external financing internal factors external factors |
| title | Analyzing Company’s Internal and External Factors Influencing the Financing Model through Structural Equation Modeling (SEM) |
| title_full | Analyzing Company’s Internal and External Factors Influencing the Financing Model through Structural Equation Modeling (SEM) |
| title_fullStr | Analyzing Company’s Internal and External Factors Influencing the Financing Model through Structural Equation Modeling (SEM) |
| title_full_unstemmed | Analyzing Company’s Internal and External Factors Influencing the Financing Model through Structural Equation Modeling (SEM) |
| title_short | Analyzing Company’s Internal and External Factors Influencing the Financing Model through Structural Equation Modeling (SEM) |
| title_sort | analyzing company s internal and external factors influencing the financing model through structural equation modeling sem |
| topic | development of financing systems internal financing external financing internal factors external factors |
| url | https://amf.ui.ac.ir/article_28697_ccff28bce6088d365183147862868a35.pdf |
| work_keys_str_mv | AT sajadveisi analyzingcompanysinternalandexternalfactorsinfluencingthefinancingmodelthroughstructuralequationmodelingsem AT seyedalivaez analyzingcompanysinternalandexternalfactorsinfluencingthefinancingmodelthroughstructuralequationmodelingsem AT ebrahimanvari analyzingcompanysinternalandexternalfactorsinfluencingthefinancingmodelthroughstructuralequationmodelingsem AT esmaeelmazaheri analyzingcompanysinternalandexternalfactorsinfluencingthefinancingmodelthroughstructuralequationmodelingsem |