54 Pages Posted: 10 Jun 2000
Date Written: October 1994
We investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries. At an aggregate level, firm leverage is fairly similar across the G-7 countries. We find that factors identified by previous studies as important in determining the cross- section of capital structure in the U.S. affect firm leverage in other countries as well. However, a deeper examination of the U.S. and foreign evidence suggests that the theoretical underpinnings of the observed correlations are still largely unresolved.
Suggested Citation: Suggested Citation
Rajan, Raghuram G. and Zingales, Luigi, What Do We Know About Capital Structure? Some Evidence from International Data (October 1994). NBER Working Paper No. w4875. Available at SSRN: https://ssrn.com/abstract=226515
By John Graham