Capital Structure Determinants for Emerging Markets by Geographic Region

37 Pages Posted: 3 Nov 2015

See all articles by Mark Foster

Mark Foster

University of North Alabama

Michael Young

Central Washington University

Date Written: November 2, 2015


Finance theory suggests that firms should choose a capital structure that maximizes owner wealth and a plethora of research has sought to identify factors which influence the debt/equity choice. The bulk of this research has been limited to developed countries with little interest towards developing or emerging market firms. This study examines cross-regional similarities in capital structure determinants in an attempt to determine if any of the factors found to be significantly influential in developed markets are also important in emerging markets and are they region-specific. The specific countries of interest are: India, Indonesia, Korea (Rep), Malaysia, Thailand, Argentina, Brazil, Chile, Mexico, and Peru. These countries lie primarily in two distinct regions of the world; five in Asia and five in Latin America. Results show that emerging market factors are similar to those identified in developed markets but there are indeed regional differences.

Suggested Citation

Foster, Mark and Young, Michael, Capital Structure Determinants for Emerging Markets by Geographic Region (November 2, 2015). JFAR Vol I, 2013, Available at SSRN:

Mark Foster (Contact Author)

University of North Alabama

United States

Michael Young

Central Washington University ( email )

400 E. University Way
Ellensburg, WA 98926
United States

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