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- How Do Banking Characteristics Influence Companies Debt Features and Performance during COVID-19? A Study of Portuguese FirmsPublication . Reis, Pedro; Pinto, AntónioAbstract: This paper investigates how bank characteristics (market share, principal shareholders, profitability, and size), and the gender of the company’s board members, along with their supervisory abilities, influence the firm’s performance, cost of debt, and leverage. We extracted relevant data from a sample of nearly 18,300 Portuguese companies in 2020 (the pandemic year) to build our model with all the main explanatory variables; then, through the least absolute shrinkage and selection operator estimation, we reduced the variables. The robust ordinary least-squares standard-errors approach was applied by company size. Our findings allowed us to observe the crucial negative role of multiple bank relations, but only on the returns of small companies. A decrease in bank relations led to an increase in debt cost and reduced leverage across larger companies. Profitable banks generate higher company returns, mainly for small companies. Furthermore, the better-informed bank shareholders (management, institutional, or government) persuaded the banks to charge higher interest rates, resulting in a higher leverage ratio for companies of average size. Female board members tended to vote for lower debt ratios due to greater risk aversion, while the opposite was true of male board members. The supervisory capacity of the board in the area of bank relations showed a more substantial link with the increased financing costs of small companies. In brief, bank characteristics and board gender were strongly associated with the financial aggregates of companies relative to their size. This work contributes to the literature by using new bank characteristics and an original variable representing board ability to cope with bank relations. To the best of our knowledge, this is the first study to determine the association of the above characteristics in the Portuguese market relative to company size, and their impact on profitability, cost of debt, and leverage. The company board and banking systems should evaluate the impact of their decisions on corporate activity and make necessary adjustments.
- Corporate ownership concentration drivers in a context dominated by private SME'sPublication . Reis, Pedro; Pinto, AntónioThis paper aims to ascertain how company-specific factors influence the corporate ownership concentration of Portuguese firms. The paper employs several different regression techniques: Generalized Linear Model, Ordered Logit, 2 Stage Least Squares, Ordinary Least Squares, Truncated and Constrained regression. Additionally, to test the model's prediction power, it conducts an in and out-of-sample analysis and used joint-rolling window re- gressions and dependent variables intervals partition to test the robustness of the model under different sample restrictions. Firm size, profitability, the number of subsidiaries, and bank concentration are positive determinants of ownership concentration, while an opposite influence is found concerning auditor qualification and the board of directors' size. Significant implications are provided for the policymaking in countries where capital markets are underdeveloped, and concentrated ownership is common to help the regulator determining the power of controlling shareholders. This study enriches the literature on the determinants of corporate ownership, being the first study to approach non-public companies. It adds novelty by incorporating new company factors which are scarce in ownership studies.