Capital Structure Decisions around the World: Which Factors Are Reliably Important?
Date of this Version
1-1-2015
Document Type
Article
Rights
default
Abstract
This article examines the international determinants of capital structure using a large sample of firms from 37 countries. The reliable determinants for leverage are firm size, tangibility, industry leverage, profits, and inflation. The quality of the countries' institutions affects leverage and the adjustment speed toward target leverage in significant ways. High-quality institutions lead to faster leverage adjustments, whereas laws and traditions that safeguard debt holders relative to stockholders (e.g., more effective bankruptcy procedures and stronger creditor protection) lead to higher leverage.
Recommended Citation
Öztekin, Özde, "Capital Structure Decisions around the World: Which Factors Are Reliably Important?" (2015). College of Business Faculty Publications. 17.
https://digitalcommons.fiu.edu/business_fac/17
