The Determinants of Capital Structure Choice
Reads0
Chats0
TLDR
In this paper, the explanatory power of some of the recent theories of optimal capital structure is analyzed empirically and a factor-analytic technique is used to mitigate the measurement problems encountered when working with proxy variables.Abstract:
This paper analyzes the explanatory power of some of the recent theories of optimal capital structure. The study extends empirical work on capital structure theory in three ways. First, it examines a much broader set of capital structure theories, many of which have not previously been analyzed empirically. Second, since the theories have different empirical implications in regard to different types of debt instruments, the authors analyze measures of short-term, long-term, and convertible debt rather than an aggregate measure of total debt. Third, the study uses a factor-analytic technique that mitigates the measurement problems encountered when working with proxy variables.read more
Citations
More filters
Journal ArticleDOI
Determinants of Capital Structure: A Case Study of Listed Companies of Nepal
TL;DR: In this article, an attempt has been made to examine the determinants of capital structure -size, business risk, growth rate, earning rate, dividend payout, debt service capacity, and degree of operating leverage-of the companies listed to Nepal Stock Exchange Ltd. as of July 16, 2003.
Journal ArticleDOI
Voluntary corporate governance structure and financial distress: Evidence from Australia
TL;DR: In this paper, the authors examined the role of voluntary adoption of corporate governance mechanisms in mitigating the financial distress status of firms and found that greater levels of blockholder and director ownership and the existence of a separate audit committee are associated with lower financial distress likelihood.
Journal ArticleDOI
Why Have Debt Ratios Increased for Firms in Emerging Markets
TL;DR: In this article, the authors studied trends in capital structure between 1980 and 2004 in a sample of over 11,000 firms from 34 emerging markets and found that the increase in debt ratios can largely be attributed to changes in the characteristics of emerging market firms over this period.
Journal ArticleDOI
Do accountants make better chief financial officers
TL;DR: This article examined whether CFOs with accounting backgrounds are associated with more conservative corporate outcomes and found that firms with accountant CFO are less likely to engage in external financing and exhibit higher cost efficiency.
Journal ArticleDOI
Capital structure and corporate governance quality: Evidence from the Institutional Shareholder Services (ISS)
TL;DR: In this article, the authors explored how capital structure is influenced by aggregate corporate governance quality and found that firms with poor governance are significantly more leveraged. And they used broad-based comprehensive governance metrics provided by the Institutional Shareholder Services (ISS) to measure governance quality.
References
More filters
Journal ArticleDOI
Theory of the firm: Managerial behavior, agency costs and ownership structure
TL;DR: In this article, the authors draw on recent progress in the theory of property rights, agency, and finance to develop a theory of ownership structure for the firm, which casts new light on and has implications for a variety of issues in the professional and popular literature.
Journal ArticleDOI
Significance tests and goodness of fit in the analysis of covariance structures
TL;DR: In this article, a general null model based on modified independence among variables is proposed to provide an additional reference point for the statistical and scientific evaluation of covariance structure models, and the importance of supplementing statistical evaluation with incremental fit indices associated with the comparison of hierarchical models.
Journal ArticleDOI
Corporate financing and investment decisions when firms have information that investors do not have
TL;DR: In this paper, a firm that must issue common stock to raise cash to undertake a valuable investment opportunity is considered, and an equilibrium model of the issue-invest decision is developed under these assumptions.
Journal ArticleDOI
Determinants of corporate borrowing
TL;DR: In this article, the authors predict that corporate borrowing is inversely related to the proportion of market value accounted for by real options and rationalize other aspects of corporate borrowing behavior, such as the practice of matching maturities of assets and debt liabilities.
Journal ArticleDOI
Debt and taxes
TL;DR: Miller et al. as discussed by the authors presented a paper on the thirty-fiveth annual meeting of the American Finance Association, Atlantic City, New Jersey, September 16-18, 1976 (May, 1977), pp. 261-275.
Related Papers (5)
What Do We Know about Capital Structure? Some Evidence from International Data
Raghuram G. Rajan,Luigi Zingales +1 more