The World Finance & Banking Symposium (WFBS) is a highly regarded international conference that serves as a meeting ground for researchers, academics, and professionals from the finance and banking sectors. Recently, Salford Business School’s Dr Zeeshan Syed represented the University at this esteemed event, where he had the opportunity to engage with thought leaders, gain insights into emerging trends, and present his research on credit ratings and capital structure to a global audience.
The Importance of credit ratings and capital structure
Zeeshan’s research delves into the complex relationship between credit ratings and capital structure, exploring how firms’ credit ratings influence their choice of capital providers and sources of finance. Capital structure, often called the enigma of corporate finance, is a firm’s most crucial finance decision. It influences subsequent decisions such as reinvestment into business, business expansion, and capital spending that directly impact a country’s GDP (gross domestic product). However, the process by which firms determine their capital structure remains a mystery to many researchers, adding an element of intrigue to the discussion.
The conference’s audience consisted of finance scholars, industry experts and policymakers, all bringing diverse perspectives to the discussion, with Zeeshan’s presentation covering two key areas:
- Theoretical framework: discussing key theories, such as the Trade-Off Theory and Pecking Order Theory, showcasing how these frameworks are very limited in explaining the capital structure choices of firms.
- Data: Zeeshan’s study collected 22 years of data for 629 non-financial firms. The study establishes that firms exhibit strategic behaviour (akin to human thinking) when choosing their capital providers. This finding has significant implications for understanding how firms make financial decisions. Zeeshan’s analysis estimates conditional probabilities and observes that firms’ current, past and expected future ratings can impact managers’ decisions regarding selecting their capital providers.
On attending and participating in the conference, Zeeshan commented: “Participating in the World Finance & Banking Symposium was a truly transformative experience. It provided a platform to showcase my research and deepened my understanding of global financial trends. The exchange of ideas and constructive feedback will help refine my work, ensuring its relevance in academic and practical financial discussions. I am excited to incorporate these insights into further research and collaborations in finance and banking, feeling inspired and motivated by the experience.”
