Journal of Corporate Finance Vol. 17 No. 5 2011
Firm- and country-level determinants of corporate leverage: Some new international evidence
Abstract
This research analyzes the determinants of capital structure across 37 countries. Institutional arrangements matter for capital structure decisions; however, firm-level covariates drive two-thirds of the variation in capital structure across countries, while the country-level covariates explain the remaining one-third. The observed relationships between the country-level determinants and leverage provide strong support to the predictions of both the trade-off and the pecking-order theories. Country-level determinants serve as substitute mechanisms for the firm-level, industry-level, and macroeconomic determinants by moderating their marginal impact on leverage.
- DOI
- 10.1016/j.jcorpfin.2011.08.004
- Volume
- 17
- Issue
- 5
- Pages
- 1457-1474
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref