Firm leverage decisions: Does industry matter?

Silvia Z. Islam and Sarod Khandaker ()

The North American Journal of Economics and Finance, 2015, vol. 31, issue C, 94-107

Abstract: We use a standard capital structure mode l to investigate the firm leverage decisions of 1620 companies listed in the Australian Securities Exchange (ASX) across a span of 13 years (2000–2012), dividing the sample into mining and other industries (non-mining). We also test for significant differences in leverage decisions between these two groups by applying a dummy variable approach. Our findings show that fundamental differences exist between mining and non-mining companies when making leverage decisions. We find evidence that mining firms are more sensitive to profitability and asset tangibility where neither profitability nor asset tangibility has significant association for non-mining firms. Overall results suggest that industry-type does matter for firms making leverage decisions.

Keywords: Leverage; Mining firms; Profitability; Asset Tangibility; Dummy variable (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:31:y:2015:i:c:p:94-107

DOI: 10.1016/j.najef.2014.10.005

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