The Effects of Corporate Social Responsibility and Capital Investments on the Sustainable Growth Rate and the Components of the Rate

Capital Structure Dynamics: Evidence from the Korean Listing Market

“…However, the field of corporate finance has shown interest in the sustainable growth of a firm rather than external growth, and capital structure is a factor that determines the sustainable growth rate of a firm [19][20][21][22][23][24][25][26]. The sustainable growth rate, proposed by Higgins [20], refers to the growth rate that can be achieved without raising additional equity capital and assumes that no equity issuance is made; thus, the capital required for growth can only be financed through debt financing.…”

“…The sustainable growth rate, proposed by Higgins [20], refers to the growth rate that can be achieved without raising additional equity capital and assumes that no equity issuance is made; thus, the capital required for growth can only be financed through debt financing. Numerous empirical studies have focused on the determinants of the sustainable growth rate and the debt-to-equity ratio, and there is a lack of research on equity issuance as an efficient method to raise capital [20,21,[23][24][25][26]. A rational company's choice to raise capital does not solely rely on either debt or equity, but rather it forms the optimal capital structure through an appropriate combination of both.…”