Determinants of Capital Structure: Insights from Japanese Private Firms

Naheed Rabbani ()
Additional contact information
Naheed Rabbani: University of Dhaka

Asia-Pacific Financial Markets, 2020, vol. 27, issue 4, No 5, 587-603

Abstract: Abstract This study examines the capital structure of Japanese private firms. Using a dataset over a period of more than thirty years, the study shows that the leverage ratios of private firms remain stable over the long term and exhibit greater persistence than do those of public firms. Regression analysis shows that the firms’ future leverage ratios are significantly positively related to initial leverage ratios. Most of the variation in leverage ratios can be explained by unobservable factors. Private firms are found to have a significantly higher leverage ratio than public firms. Adjustment to the target leverage ratio is slower for private firms than for public firms, reflecting the high adjustment costs of the former.

Keywords: Capital structure; Leverage; Determinant; Stability; Japan (search for similar items in EconPapers)
JEL-codes: G10 G32 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s10690-020-09307-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:apfinm:v:27:y:2020:i:4:d:10.1007_s10690-020-09307-3

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/10690/PS2

DOI: 10.1007/s10690-020-09307-3

Access Statistics for this article

Asia-Pacific Financial Markets is currently edited by Jiro Akahori

More articles in Asia-Pacific Financial Markets from Springer, Japanese Association of Financial Economics and Engineering
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().