THE ADJUSTMENT TO TARGET LEVERAGE OF SPANISH PUBLIC FIRMS: MACROECONOMIC CONDITIONS AND DISTANCE FROM TARGET

Gonzalo Rubio and Francisco Sogorb
Additional contact information
Gonzalo Rubio: Universidad CEU Cardenal Herrera
Francisco Sogorb: Universidad CEU Cardenal Herrera

Revista de Economia Aplicada, 2011, vol. 19, issue 3, 35-63

Abstract: Our evidence suggests that Spanish public firms adjust slowly toward their capital structure target, with the typical firm closing approximately one-fifth of the gap between its current and target debt ratios each year. This finding is in contrast with previous evidence; however, we employ econometric techniques specially designed for highly persistent dependent variables, like market debt ratios. Moreover, our evidence does not seem to indicate that macroeconomic conditions, at least under the conditions experienced by the Spanish economy during our sample period, affect the speed of adjustment. If anything, our results are consistent with faster adjustments during economic states in which the distance between the current and target leverage is the greatest.

Keywords: market debt ratio; dynamic trade-off; target leverage; speed of adjustment; macroeconomics; distance from target (search for similar items in EconPapers)
JEL-codes: C33 E30 G32 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.revecap.com/revista/numeros/57/pdf/rubio_sogorb.pdf Full text (application/pdf)

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:rev:reveca:v:19:y:2011:i:3:p:35-63

Ordering information: This journal article can be ordered from
http://www.revecap.com/revista/

Access Statistics for this article

Revista de Economia Aplicada is currently edited by Angel de la Fuente, Germá Bel, José Ignacio García, Javier Gardeazábal, Diego Rodríguez and Rafael Santamaría

More articles in Revista de Economia Aplicada from Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica Revista de Economía Aplicada Departamento de Estructura Económica y Economía Pública Facultad de Ciencias Económicas Gran Vía, 2 50005 Zaragoza Spain. Contact information at EDIRC.
Bibliographic data for series maintained by Ana Belén Gracia ().