Capital Structure in South Korea: A Quantile Regression Approach
Bassam Fattouh (),
Laurence Harris and
Additional contact information
Bassam Fattouh: University of London - School of Oriental and African Studies (SOAS)
Laurence Harris: University of London - Centre for Financial and Management Studies
CEIS Research Paper from Tor Vergata University, CEIS
Knowledge of how South Korean firms choose their capital structures has particular value due to the country's specific corporate structure and the role of leverage in the evolution of its financial crisis of 1997. Using a large panel for the years 1992-2001 we investigate the evolution and determinants of South Korean firms' capital structure and focus on the differences between firms in different quantiles of the debt-capital distribution. Although regression estimates find that standard variables for asymmetric information costs explain South Korean firms' debt-capital ratios, conventional techniques using conditional means of the variables do not take full account of the heterogeneity of the sample of firms. Conditional quantile regressions show that while variables associated with standard models are significant throughout the distribution, there are considerable differences, including differences in sign, in their impact on firms with different levels of leverage. Those observed non-linearities in the determinants of capital structure are consistent with a model of capital structure that includes both costs resulting from asymmetric information and an upper bound on the debt-capital ratio.
Keywords: Capital structure; Quantile regression; South Korea JEL Classifications: G32; O53 (search for similar items in EconPapers)
JEL-codes: G32 O53 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Journal Article: Capital structure in South Korea: a quantile regression approach (2005)
Working Paper: Capital structure in South Korea: A Quantile Regression Approach (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:rtv:ceisrp:40
Ordering information: This working paper can be ordered from
CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
Access Statistics for this paper
More papers in CEIS Research Paper from Tor Vergata University, CEIS CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma. Contact information at EDIRC.
Bibliographic data for series maintained by Barbara Piazzi ().