Capital Structure Around the World: The Roles of Firm- and Country-Specific Determinants

45 Pages Posted: 15 Oct 2007

See all articles by Abe de Jong

Abe de Jong

Rotterdam School of Management, Erasmus University

Rezaul Kabir

University of Twente - Department of Finance and Accounting

Thuy Thu Nguyen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management, Department of Finance; Business Administration Faculty, Foreign Trade University

Date Written: September 11, 2007

Abstract

We analyze the importance of firm-specific and country-specific factors in the leverage choice of firms from 42 countries around the world. Our analysis yields two new results. First, we find that firm-specific determinants of leverage differ across countries, while prior studies implicitly assume equal impact of firm-specific factors. Second, although we concur with the conventional direct impact of country-specific factors on the capital structure of firms, we show that there is an indirect impact because country-specific factors also influence the roles of firm-specific determinants of leverage.

Keywords: country-specific factors, firm-specific factors, leverage, Capital structure, international evidence

Suggested Citation

de Jong, Abe and Kabir, Rezaul and Nguyen, Thuy Thu, Capital Structure Around the World: The Roles of Firm- and Country-Specific Determinants (September 11, 2007). ERIM Report Series Reference No. ERS-2007-058-F&A. Available at SSRN: https://ssrn.com/abstract=1019130

Abe De Jong (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T08-25
Rotterdam, 3000 DR
Netherlands
+31 10 408 1022 (Phone)

HOME PAGE: http://https://www.rsm.nl/people/abe-de-jong/

Rezaul Kabir

University of Twente - Department of Finance and Accounting ( email )

Faculty of Behavioral, Management & Social Science
P. O. Box 217
Enschede, 7500 AE
Netherlands
+31 53 489 4512 (Phone)
+31 53 489 2159 (Fax)

HOME PAGE: http://https://people.utwente.nl/r.kabir

Thuy Thu Nguyen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management, Department of Finance ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
0031 1048 2792 (Phone)

Business Administration Faculty, Foreign Trade University ( email )

91 Chua Lang
Dong Da District
Hanoi
Vietnam

Register to save articles to
your library

Register

Paper statistics

Downloads
604
Abstract Views
2,397
rank
42,883
PlumX Metrics