The Importance of Friends and Corporate Finance Practices Around the World

dc.contributor.advisorAl Mamun, Muhammad
dc.contributor.advisorBalachandran, Balasingham
dc.contributor.advisorKaruna, Christo
dc.contributor.advisorBaghdadi, Ghasan
dc.contributor.authorGrami, Madaniah
dc.date.accessioned2024-10-10T14:50:44Z
dc.date.issued2024-12
dc.description.abstractThis dissertation adopts an interdisciplinary approach by drawing on the theoretical framework of the New Institutional Economics proposed by Williamson (2000). It investigates the influence of the importance of friends (FRI) on the financial decisions and outcomes of listed firms from around the world. The thesis is structured into six chapters: an introduction, a presentation of the concept of the importance of friends, three empirical chapters, and a conclusion. The introductory chapter builds on the existing literature on friendship and it explores the following: (a) the background, (b) the motivation supported by theoretical arguments and anecdotal evidence linking FRI with corporate finance decisions, (c) summaries of the three empirical chapters, and (d) contribution to the literature on this subject. The second chapter explains the conceptual understanding of the importance of friends. The first empirical chapter (Chapter 3) explores how FRI, as a measure of social connections, shapes firms’ relationships with their suppliers. Specifically, it examines the role of FRI on firms’ trade credit policy (TC) and shows that higher FRI increases firms’ usage of TC. Extending the potential implication of FRI on the managerial agency behavior of firms, the second empirical chapter (Chapter 4) investigates the influence of FRI on firms’ dividend policy. Empirical results show that higher FRI increases the dividend decision-to-pay and payout ratio; in fact, it mitigates the agency implications of dividend policy. The third empirical chapter (Chapter 5) extends the potential caring argument of FRI to firms’ communities by examining its influence on businesses’ environmental, social, and governance (ESG) performance. The results show that higher FRI promotes firms’ ESG performance. Collectively, these findings offer a new perspective on understanding corporate decisions related to financing, distribution, and stakeholder commitments. The findings from this thesis have significant implications for relevant stakeholders in making investment decisions, financing choices, and other related decisions.
dc.format.extent275
dc.identifier.urihttps://hdl.handle.net/20.500.14154/73199
dc.language.isoen_US
dc.publisherLa Trobe University
dc.subjectFriendship
dc.subjectTrade credit
dc.subjectNational culture
dc.subjectDividend policy
dc.subjectAgency conflicts
dc.subjectESG
dc.subjectEnvironmental performance
dc.subjectSocial performance
dc.subjectGovernance performance
dc.titleThe Importance of Friends and Corporate Finance Practices Around the World
dc.typeThesis
sdl.degree.departmentBusiness School
sdl.degree.disciplineFinance
sdl.degree.grantorLa Trobe University
sdl.degree.nameDoctor of Philosophy
sdl.thesis.sourceSACM - Australia

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