Abstract

http://ssrn.com/abstract=1787068
 


 



Capital Structure Convergence: The Role of Financial Development


Angelos A. Antzoulatos


University of Piraeus - Department of Banking and Financial Management

Kostas Koufopoulos


University of Warwick - Finance Group

Costas Lambrinoudakis


University of Piraeus - Department of Banking and Financial Management

Emmanuel D. Tsiritakis


University of Piraeus

January 22, 2014

Midwest Finance Association 2012 Annual Meetings Paper

Abstract:     
We explore the effect of economy-wide supply-side factors on corporate capital structure. As theoretical papers indicate, and recent empirical papers corroborate, this effect may be both significant and time-varying. In such a case, the leverage ratios of firms would tend to move in tandem over time, their ‘distance’ being driven by firm-specific factors. Our results indicate that a large fraction of firms do exhibit such convergence. Moreover, convergence seemingly got stronger over time and was likely driven by financial development, which, since the early 1980s, steadily increased firms’ access to external finance.

Number of Pages in PDF File: 48

Keywords: Capital structure, Convergence, Financial constraints, Financial development

JEL Classification: G30, G32

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Date posted: March 17, 2011 ; Last revised: February 27, 2014

Suggested Citation

Antzoulatos, Angelos A. and Koufopoulos, Kostas and Lambrinoudakis, Costas and Tsiritakis, Emmanuel D., Capital Structure Convergence: The Role of Financial Development (January 22, 2014). Midwest Finance Association 2012 Annual Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1787068 or http://dx.doi.org/10.2139/ssrn.1787068

Contact Information

Angelos A. Antzoulatos
University of Piraeus - Department of Banking and Financial Management ( email )
80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR
Greece
Kostas Koufopoulos
University of Warwick - Finance Group ( email )
Gibbet Hill Rd
Coventry, CV4 7AL
Great Britain
Costas Lambrinoudakis (Contact Author)
University of Piraeus - Department of Banking and Financial Management ( email )
80 Karaoli & Dimitriou Str.
Piraeus, 18534 - GR
Greece
(+30) 210 414 2323 (Phone)
(+30) 210 414 2341 (Fax)
Emmanuel D. Tsiritakis
University of Piraeus ( email )
80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR
Greece
00302104142187 (Phone)
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