Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)

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The Effect of Operating Risk (Cash Flow Volatility) on Capital Structure: A Survey of the Literature

Authors
Kangjin Huang1, *, Leyi Zhang2, Yiyi Shan3
1Sino-French Institute, Renmin University of China (Suzhou Campus), Suzhou, 215123, China
2School of Social Sciences, The University of Manchester, Manchester, M13 9PL, England
3Malvern College, Qingdao, 266106, China
*Corresponding author. Email: thomas.noe@sbs.ox.ac.uk
Corresponding Author
Kangjin Huang
Available Online 27 December 2022.
DOI
10.2991/978-94-6463-098-5_162How to use a DOI?
Keywords
capital structure; operational risk; cash flow volatility; financial leverage
Abstract

Capital structure, a critical indicator of a company's operations, is often considered to be influenced to some extent by operational risk. Prior researchers have been divided on the subject of the latter's impact on the former. This survey encompasses theoretical and empirical papers in this field from recent decades, comparing their information cross-sectionally, including perspectives, key assumptions, definitions of variables, empirical models, selection of data, etc. A seminal theoretical paper is presented in detail. In the work, evidences suggest that, although the methodologies used and the conclusions reached by various scholars are not identical, overall, a firm's cash flow volatility is negatively related to its financial leverage. It is highly recommended that subsequent researchers conduct further research into the causal relationship between the two.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
27 December 2022
ISBN
10.2991/978-94-6463-098-5_162
ISSN
2352-5428
DOI
10.2991/978-94-6463-098-5_162How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Kangjin Huang
AU  - Leyi Zhang
AU  - Yiyi Shan
PY  - 2022
DA  - 2022/12/27
TI  - The Effect of Operating Risk (Cash Flow Volatility) on Capital Structure: A Survey of the Literature
BT  - Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)
PB  - Atlantis Press
SP  - 1428
EP  - 1437
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-098-5_162
DO  - 10.2991/978-94-6463-098-5_162
ID  - Huang2022
ER  -