2013
DOI: 10.22201/fe.01851667p.2012.282.37363
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Capital Structures in Developing Countries: The Latin American Case

Abstract: <p>Rajan and Zingales (1995) find that tangibility, growth opportunity, size and performance are the four common determinants for explaining capital structure across G-7 countries. In this study, we consider a sample of 590 firms from Argentina, Chile, Mexico, Peru and the United States (U.S.), to analyze whether the four common determinants also explain the capital structure in the Latin American countries. Moreover, we use a different sample of companies and a large number of years for U.S. firms and w… Show more

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Cited by 17 publications
(24 citation statements)
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“…To solve the endogeneity problems, we propose using instruments and lag variables (Espinosa et al, 2012;Rajan & Zingales, 1995). As instruments for SD and LD, the endogeneity variables we propose asset turnover ratio (Dumont & Svensson, 2014) and total debt to capitalisation ratio (Espinosa et al, 2012;Phuong & Bich, 2017). Based on the results of the Hausman test, the random effects model is recommended.…”
Section: Regression Results and Discussionmentioning
confidence: 99%
See 1 more Smart Citation
“…To solve the endogeneity problems, we propose using instruments and lag variables (Espinosa et al, 2012;Rajan & Zingales, 1995). As instruments for SD and LD, the endogeneity variables we propose asset turnover ratio (Dumont & Svensson, 2014) and total debt to capitalisation ratio (Espinosa et al, 2012;Phuong & Bich, 2017). Based on the results of the Hausman test, the random effects model is recommended.…”
Section: Regression Results and Discussionmentioning
confidence: 99%
“…In this case, regression using ordinary least squares (OLS) is not adequate and other models must be employed to correct it (Labra & Torrecillas, 2014). Based on previous studies, some authors have argued that endogeneity is a typical problem in panel models that should be corrected (Espinosa et al, 2012;Margaritis & Psillaki, 2010;Phuong & Bich, 2017;Rajan & Zingales, 1995). To do so, Phuong and Bich (2017) and Espinosa et al (2012) do not recommend the use of fixed or random effects models, since they consider the independent variables as exogenous.…”
Section: Sample Variables and Data Collectionmentioning
confidence: 99%
“…First, prior studies show conflicting results on the association between firm performance and its capital structure choices. Extant literature show both negative (Baker & Wurgler, 2002;Bastos, Nakamura, & Basso, 2009;Drobetz & Wanzenried, 2006;Fama & French, 2012;Hall, Hutchinson, & Michaelas, 2004;Rajan & Zingales, 1995;Titman & Wessel, 1988;Yang, Lee, Gu, & Lee, 2010) and positive (Antoniou, Guney, & Paudyal, 2009;Espinosa, Maquieira, Vieito, & González, 2012;Huang & Song, 2006;Memon et al, 2015;Murray & Vidhan, 2009) relationship between firm capital structure and firm performance. This motivates further studies that adopt alternative indicators for firm performance.…”
Section: Introductionmentioning
confidence: 99%
“…De lo anterior, se concluye que la teoría del pecking order ofrece una explicación parcial de las decisiones de financiamiento de las empresas chilenas. Espinosa et al (2012) estudian la estructura de capital en las empresas latinoamericanas durante un periodo comprendido entre los años 1998 a 2007. La muestra de las empresas se concentra en Argentina, Chile, México y Perú, pues dichos países presentan los mercados de capitales más desarrollados.…”
Section: Estudios Aplicados a Latinoaméricaunclassified