Firm- and country-level determinants of corporate leverage: Some new international evidence

Ali Gungoraydinoglu and Ozde Oztekin ()

Journal of Corporate Finance, 2011, vol. 17, issue 5, 1457-1474

Abstract: This research analyzes the determinants of capital structure across 37 countries. Institutional arrangements matter for capital structure decisions; however, firm-level covariates drive two-thirds of the variation in capital structure across countries, while the country-level covariates explain the remaining one-third. The observed relationships between the country-level determinants and leverage provide strong support to the predictions of both the trade-off and the pecking-order theories. Country-level determinants serve as substitute mechanisms for the firm-level, industry-level, and macroeconomic determinants by moderating their marginal impact on leverage.

Keywords: Dynamic capital structure; International; Institutions; Trade-off; Pecking-order (search for similar items in EconPapers)
JEL-codes: G20 G32 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (68)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:17:y:2011:i:5:p:1457-1474

DOI: 10.1016/j.jcorpfin.2011.08.004

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