Capital Structure around the World: The Roles of Firm- and Country-Specific Determinants

Abe de Jong, Rezaul Kabir and Thuy Thu Nguyen

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: We analyze the importance of firm-specific and country-specific factors in the leverage choice of firms from 42 countries around the world. Our analysis yields two new results. First, we find that firm-specific determinants of leverage differ across countries, while prior studies implicitly assume equal impact of firm-specific factors. Second, although we concur with the conventional direct impact of country-specific factors on the capital structure of firms, we show that there is an indirect impact because country-specific factors also influence the roles of firm-specific determinants of leverage.

Keywords: Capital structure; country-specific factors; firm-specific factors; international evidence; leverage (search for similar items in EconPapers)
JEL-codes: G3 G30 M (search for similar items in EconPapers)
Date: 2007-09-11
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Citations: View citations in EconPapers (4)

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Journal Article: Capital structure around the world: The roles of firm- and country-specific determinants (2008)
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