An Integrated Model of Capital Structure to Study the Differences in the Speed of Adjustment to Target Corporate Debt Maturity Among Developed Countries
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Date
14/09/2011Estado
info:eu-repo/semantics/publishedVersionMetadata
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See summary in English In this paper, we propose an integrated model of capital structure to study the partial adjustment process to the optimal long term debt ratio. In our analysis, we consider the characteristics of the institutional environment as a factor that influences such adjustment. We use a sample of quoted firms from Germany, Denmark, Spain, Italy, USA, Australia, Belgium, UK and France for the period 1996 2008. The key findings are that the firms follow optimal long-term debt ratios. Such optimal ratios are determined by firm characteristics identified in the trade-off, pecking order and market timing theories and by the country institutional environment. We observe that in those countries with lower cost of adjustment, essentially in those where banks are the main source of funds, firms can reach their target debt ratio in half the time needed by those countries with higher adjustment costs.
An Integrated Model of Capital Structure to Study the Differences in the Speed of Adjustment to Target Corporate Debt Maturity Among Developed Countries
Tipo de Actividad
Artículos en revistasISSN
1755-3830Palabras Clave
See keywords in Englishcapital structure; target debt maturity; institutional environment; panel data.