Firm Complexity and Capital Structure: Evidence from Italian Diversified Firms

Daniele Monteforte and Raffaele Staglianò
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Daniele Monteforte: UniCal - Università della Calabria [Arcavacata di Rende, Italia] = University of Calabria [Italy] = Université de Calabre [Italie]
Raffaele Staglianò: MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier

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Abstract: This paper examines the links between product diversification, international diversification and capital structure for a panel of medium and large Italian firms. The results indicate that the interaction between these two dimensions of diversification strategy has a negative and significant impact on leverage. Furthermore, debt maturity analysis reveals that firms pursuing a simultaneous dual diversification strategy have, in particular, lower long‐term debt ratios. Our findings support the hypothesis that the complexity that comes from diversification reduces debt levels. Copyright © 2014 John Wiley & Sons, Ltd.

Date: 2015-06
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Published in Managerial and Decision Economics, 2015, 36 (4), pp.205-220. ⟨10.1002/mde.2660⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02048510

DOI: 10.1002/mde.2660

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