The Effects of Alternative Financial System Models on Corporate Governance

Pablo Andrés-Alonso, Valentín Azofra-Palenzuela, Félix López-Iturriaga () and José Miguel Rodríguez-Fernández

Chapter 4 in Strategic Challenges in European Banking, 2000, pp 70-111 from Palgrave Macmillan

Abstract: Abstract The explanation of the capital structures found in companies of different countries is one of the main topics in corporate finance. The capital structure theory tries to answer questions such as why some financial contracts appear more frequently in one country than in others, or why the financing models differ among countries (Hart, 1988). From Modigliani and Miller theory (1958), the financial instruments give their owners the right over the firm cash flows. Therefore, the firm capital structure is irrelevant and differences in capital structure in the international arena are a minor issue. In fact, these differences could be explained through the tax effect because each country has its own tax system.

Keywords: Corporate Governance; Capital Structure; Financial Intermediation; Financial Leverage; Market Debt (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37736-3_4

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DOI: 10.1057/9780230377363_4

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