Are the determinants of capital structure country or firm specific?

Psillaki, Maria; Daskalakis, Nikolaos

doi:10.1007/s11187-008-9103-4

Cited by 278 publications

(272 citation statements)

References 57 publications

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“…Indeed, the analysis includes several cross-sectional variables and extends over several (six) years. Such a panel data analysis is adopted by a majority of previous researches because it is claimed to provide a greater depth analysis than other cross-sectional data analysis (Daskalakis and Psillaki 2008;Psillaki and Daskalakis 2009;Dasilas and Papasyriopoulos 2015;Dedu et al 2014;Jaba et al 2017); nevertheless none should be a priori rejected, due to their complementarity (García-Gallego and Mures-Quintana 2016). Firstly, according to Wooldridge (2010) and Hsiao (2014), this data analysis is rarely influenced by the multicollinearity among the representative data, whence can provide greater evaluations.…”

Section: Model Specificationmentioning

confidence: 99%

An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies

Kang

Ausloos

2017

Economies

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Abstract:Credit risk rating is shown to be a relevant determinant in order to estimate good corporate governance and to self-optimize capital structure. The conclusion is argued from a study on a selected (and justified) sample of (182) companies listed on the Shanghai Stock Exchange (SHSE) and the Shenzhen Stock Exchange (SZSE) and which use the same Shanghai Brilliance Credit Rating & Investors Service Company (SBCR) assessment criteria, for their credit ratings, from 2010 to 2015. Practically, 3 debt ratios are examined in terms of 11 characteristic variables. Moreover, any relationship between credit rating and corporate governance can be thought to be an interesting finding. The relationship we find between credit rating and leverage is not as evident as that found by other researchers for different countries; it is significantly positively related to the outside director, firm size, tangible assets and firm age, and CEO and chairman office plurality. However, leverage is found to be negatively correlated with board size, profitability, growth opportunity, and non-debt tax shield. Credit rating is positively associated with leverage, but in a less significant way. CEO-Board chairship duality is insignificantly related to leverage. The non-debt tax shield is significantly correlated with leverage. The correlation coefficient between CEO duality and auditor is positive but weakly significant, but seems not consistent with expectations. Finally, profitability cause could be regarded as an interesting finding. Indeed, there is an inverse correlation between profitability and total debt (Notice that the result supports the pecking order theory). In conclusion, it appears that credit rating has less effect on the so listed large Chinese companies than in other countries. Nevertheless, the perspective of assessing credit risk rating by relevant agencies is indubitably a recommended time dependent leverage determinant.

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Section: Model Specificationmentioning

confidence: 99%

An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies

Kang

Ausloos

2017

Economies

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“…Within Europe, Psillaki and Daskalakis (2009) look at four countries (Greece, France, Italy and Portugal), focusing on the firm-specific factors that they find are common in determining capital structure across countries. They find that the relationships between leverage and firm characteristics such as size or profitability have consistently signed coefficients across the different countries.…”

Section: Capital Structure Of Smesmentioning

confidence: 99%

Financial structure and diversification of European firms

Lawless

OʼConnell²,

O’Toole

2015

Applied Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: Small and medium enterprises have been shown to rely mainly on banks for funding and, unlike larger firms, rarely have direct access to capital markets. This paper looks at the extent to which SMEs avail of a wider range of funding options and how their use differs across firms and countries. Using Terms of use: Documents in EconStor may

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“…The cost of financial difficulties depends on the type of assets the company has. If a company maintains substantial investments in land, equipment and other tangible assets, it will have less financial distress costs than firms that rely on intangible assets (Psillaki and Daskalakis, 2009) Theoretically, Modigliani and Miller (1963) states in capital structure theory and Baxter (1967) in balancing theory explained that the increase of financial leverage has an impact on the increase of company value. While the value of the company will increase only if the company's performance increases.…”

Section: Introductionmentioning

confidence: 99%

Dynamic Model of Firm Value: Evidence from Indonesian Manufacturing Companies

Thamrin

Syamsurijal

Sulastri

et al. 2018

Sriwijaya Int. J. of Dynamic Eco. And Buss.

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Abstract:This study aims to determine the factors that affect to firm value. The data used in this study is secondary data obtained from the Indonesia Stock Exchange which includes financial statements. This research sample uses 45 manufacturing companies, the period 2012-2016. The analysis used is a quantitative approach with panel data regression model, with estimation of fixed effect model. The findings of this study indicate that simultaneously the value of firms is influenced by investment decisions, financial decisions, and financial performance. While partially, financing decision has dominant influence from other variables, namely investment decision dan corporate performance. The conclusions of this study indicate that investment decisions and firm performance have a positive relationship to firm value, while financing decisions have a negative effect on firm value. In addition, the lag of firm value shows the long-term impact on the firm's value model.

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Are the determinants of capital structure country or firm specific?

Abstract: Capital structure, SME financing, C23, G32, L26,

Cited by 278 publications

References 57 publications

An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies

An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies

Financial structure and diversification of European firms

Dynamic Model of Firm Value: Evidence from Indonesian Manufacturing Companies

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