The zero-debt puzzle in BRICS countries: Disentangling the financial flexibility and financial constraints hypotheses
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Date
2024-07-01Estado
info:eu-repo/semantics/publishedVersionMetadata
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, This study analyzes the zero-debt decisions of BRICS firms using a bivariate probit model. The
leading hypotheses are financial flexibility and financial constraints. On the demand-side, our
findings reveal that managerial debt aversion, early lifecycle stage, growth opportunities, sol
vency, and concentrated ownership contribute to the lack of debt. Similarly, a country’s insti
tutional quality correlates with firms’ debt-free status. On the supply-side, creditors fund
companies with poor financial records in countries with robust markets and economic freedom.
Financial flexibility and restrictions leading to zero debt are linked to firm and institutional
characteristics in emerging countries.
The zero-debt puzzle in BRICS countries: Disentangling the financial flexibility and financial constraints hypotheses
Tipo de Actividad
Artículos en revistasISSN
1566-0141Palabras Clave
.Zero leverage BRICS Financial flexibility Financial restrictions Capital structure Bivariate probit model