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

Author

Listed:
  • Jorge Feregrino

    (Fes Acatlán, UNAM, México City 53150, Mexico)

  • Juan Felipe Espinosa-Cristia

    (Departamento de Ingeniería Comercial, Universidad Técnica Federico Santa María, Valparaíso 2390123, Chile)

  • Nelson Lay

    (Facultad de Educación y Ciencias Sociales, Universidad Andres Bello, Viña del Mar 2531015, Chile)

  • Luis Leyton

    (Facultad de Economía y Negocios, Universidad Andres Bello, Viña del Mar 2531015, Chile)

Abstract

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.

Suggested Citation

  • Jorge Feregrino & Juan Felipe Espinosa-Cristia & Nelson Lay & Luis Leyton, 2022. "Inappropriate Corporate Strategies: Latin American Companies That Increase Their Value by Short-Term Liabilities," IJFS, MDPI, vol. 10(4), pages 1-15, October.
    • Handle: RePEc:gam:jijfss:v:10:y:2022:i:4:p:100-:d:958269
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    References listed on IDEAS

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