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- The low‐carbon equity market: A new alternative for investment diversification?Publication . Gabriel, Vítor Manuel de Sousa; Lozano, María Belén; Matias, FernandaAddressing the topic of ethical investment, this paper considers stock market indices related to climate change and provides the first comprehensive analysis of the links between low-carbon equities and conventional equities. Results show that in the long run, low carbon economy indices do not behave like conventional indices, and no balance relationship is identified between the two, such that investors can find in the low-carbon sector an opportunity to diversify investment as an alternative to traditional equity investment. In the short-run, the two investment segments display identical behaviour, especially in contemporary terms, with daily dynamics driven fundamentally by market factors. These results will help regulators and policy makers to design policies for sustainable equity investment according to macroprudential policies.
- How do Spanish unlisted family firms rebalance their capital structures?Publication . Serrasqueiro, Zelia; Matias, Fernanda; Dieguez-Soto, JulioPurpose This paper seeks to analyze the family firm's capital structure decisions, focusing on the speed of adjustment (SOA) as well as on the effect of distance from the target capital structure on the SOA towards target short-term and long-term debt ratios in unlisted small and medium-sized family firms. Design/methodology/approach Methodologically, we use dynamic panel data estimators to estimate the effects of distance on the speeds of adjustment towards those targets. Data for the period 2006-2014 were collected for two research sub-samples: one sub-sample with 398 family firms; the other sub-sample contains 217 non-family firms. Findings The results show that the deviation from the target debt ratios impacts negatively on the speeds of adjustment towards target short-term and long-term debt ratios in unlisted family firms. These results suggest that family firms, deviating from target debt ratios, face deviation costs, i.e. insolvency costs, inferior to the adjustment costs, i.e. transaction costs. Therefore, family firms stay away from the target debt ratios for a long time than do non-family firms. Research limitations/implications The research sample comprises a low number of family firms, therefore for future research we suggest increasing the size of the sample of family firms to get a deeper understanding of family firms' SOA towards capital structure. Additionally, we suggest the analysis of other potential determinants of the speed of adjustment towards target capital structure. Practical implications The results obtained suggest that the distance from the target short-term and long-term debt ratios can be avoided if these firms do not depend almost exclusively on internal finance to adjust towards target capital structure. Moreover, for policymakers, we suggest the creation/promotion of alternative external finance sources, allowing reduced transaction costs that contribute to a faster adjustment of small family firms towards target capital structure. Originality/value The most previous research focusing on capital structure decisions have focused on listed family firms. To fill this gap, this study examines the speed of adjustment towards target debt ratios in the context of unlisted family firms. Moreover, transaction costs are a function of debt maturity, therefore this study examines separately the speeds of adjustment towards target short-term and long-term debt ratios. This paper shows that the adjustment costs (i.e. transaction costs) could hold back family firms from rebalancing its capital structure.