Evolution of Capital Structure in East Asia: Corporate Inertia or Endeavours?

Nigel Driffield and Sarmistha Pal

No 3426, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The present paper examines the capital structure adjustment dynamics of listed non-financial corporations in seven East Asian countries during 1994-2002. Compared to firms in the least affected countries, average leverages were much higher among firms in the worst affected countries while the average speeds of adjustment were lower. This general ranking is robust to various alternative specifications and sample selections. We argue that this pattern is closely linked to weaknesses in regulatory environment and lack of access to alternative sources of finance in the worst affected countries.

Keywords: generalised methods of moments; capital structure dynamics; partial adjustment models; inertia and endeavours; firm- and time-varying speed (search for similar items in EconPapers)
JEL-codes: G32 O16 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2008-04
New Economics Papers: this item is included in nep-cfn and nep-sea
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Citations: View citations in EconPapers (4)

Published - published in: Journal of the Royal Statistical Society, Series A (Statistics in Society), 2010, 173 (1), 1- 29

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Related works:
Working Paper: Evolution of Capital Structure in East Asia: Corporate Inertia or Endeavours? (2016)
Journal Article: Evolution of capital structure in east Asia—corporate inertia or endeavours? (2010)
Working Paper: Evolution of Capital Strcture in East Asia: Corporate Inertia or Endeavours? (2008)
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