Capital Structure Dynamics with Interrelated Adjustment: Australian Evidence

Paul Gatward and Ian G. Sharpe
Additional contact information
Paul Gatward: School of Banking and Finance, The University of New South Wales, Sydney NSW 2052; E-mail: I Sharpe@unsw.edu.au
Ian G. Sharpe: School of Banking and Finance, The University of New South Wales, Sydney NSW 2052; E-mail: I Sharpe@unsw.edu.au

Australian Journal of Management, 1996, vol. 21, issue 2, 89-112

Abstract: The paper examines the dynamics of financial structure decisions through the specification and estimation of a dynamic model of capital structure choice. Using a multivariate adjustment model and pooled annual time series/crosssectional data for 164 publicly listed Australian firms over the 1967–1985 period, we find evidence of interrelated adjustment, interdependence in investment and financing decisions, and very slow adjustment to the desired capital structure. The model also sheds light on the long-run determinants of capital structure of Australian firms, including their debt maturity choice.

Keywords: CAPITAL: DYNAMICS; ADJUSTMENT; AUSTRALIAN (search for similar items in EconPapers)
Date: 1996
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/031289629602100201 (text/html)

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:sae:ausman:v:21:y:1996:i:2:p:89-112

DOI: 10.1177/031289629602100201

Access Statistics for this article

More articles in Australian Journal of Management from Australian School of Business
Bibliographic data for series maintained by SAGE Publications ().