Abstract

http://ssrn.com/abstract=1787068
 


 



Supply of Capital and Capital Structure: 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

November 30, 2015

Midwest Finance Association 2012 Annual Meetings Paper

Abstract:     
We explore the effect of financial development on corporate capital structure and the tightness of financial constraints that firms face. We employ an econometric technique which allows us to explicitly test for convergence in capital structure. This technique increases the power of our statistical tests. In doing so, we identify a group of convergent firms. The driving force of convergence is financial development, which positively affects the firms’ leverage ratio. We also identify a group of firms, whose leverage is not affected by financial development, because they are financially constrained.

Number of Pages in PDF File: 74

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

JEL Classification: G30, G32


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Date posted: March 17, 2011 ; Last revised: January 7, 2016

Suggested Citation

Antzoulatos, Angelos A. and Koufopoulos, Kostas and Lambrinoudakis, Costas and Tsiritakis, Emmanuel D., Supply of Capital and Capital Structure: The Role of Financial Development (November 30, 2015). 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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