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Our study examines whether there are systematic differences in standard leverage determinants for a sample of Japanese multinational (MNCs) and domestic corporations (DCs). We find that on a univariate basis Japanese MNCs differ significantly on most variables relative to Japanese DCs. These variables include leverage, age, collateral value of assets, free cash flows, foreign exchange risks, growth, non-debt tax shields, political risks, profitability and size. Business risks are not found to be significantly different between the two groups of organizations. When modeling capital structure and the determinants of capital structure we find that Japanese multinationals have significantly less leverage than Japanese DCs, and that multinationality is an important aspect of leverage for Japanese firms. We find that business risks are not significant for modeling capital structure of domestic firms but they are for multinationals and foreign exchange risks are not significant for multinationals but are significant for domestic firms. Business risks are negatively related to leverage for multinationals and we document that significant positive leverage effects of foreign exchange risks and size are subsumed by the negative effect of business risks to explain the lower leverage experienced by Japanese multinationals relative to Japanese DCs. The lack of significance of foreign exchange risks for DCs can be explained by economies of scale in risk management, such as derivatives. Domestic firms seem to manage increased foreign exchange risks through lower leverage rather than derivative use. On the other hand, the larger multinationals can take advantage of economies of scale in risk management. Consequently, foreign exchange risks of multinationals can be managed through derivatives and other risk management operations and not reduced leverage.

This study considers the significance of the determinants of capital structure on a sample of Australian multinational and domestic corporations from 1992 to 2001. The results show that the level of leverage does not differ significantly between multinational and domestic corporations. Using cross-sectional Tobit regression analysis, the results show that, for both types of corporations, growth, profitability and size are significant determinants of leverage. Collateral value of assets is a significant determinant of leverage for domestic corporations. For multinationals, bankruptcy costs and the level of geographical diversification are significant. Surprisingly, bankruptcy costs are not significant for domestic corporations. In relation to interaction effects, bankruptcy costs and profitability are significant in explaining multinational leverage relative to domestic leverage. When industry effects are considered, the significance of the original determinants remains unchanged, but some industries became significant. Finally, the determinants of capital structure and leverage varied over the sample period for both multinational and domestic corporations.

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This study explores the impact of the global financial crisis (GFC) on Islamic and conventional stock and bond indices in 11 Islamic and eight non-Islamic countries. We find that there are benefits of Islamic stocks during the GFC, particularly during the early stage of the crisis because Islamic institutions are prohibited from holding sub-prime mortgage securities and derivatives. The strongest benefits of Islamic stocks are in the UK and USA. We conclude that there are benefits of risk reduction and stability for Islamic stocks during a financial crisis, although not necessarily during a global recession.