Posted: 5 Sep 1994
Date Written: July 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 the factors identified by previous studies as important in determining the cross-section of capital structure in the US, affect firm leverage in other countries as well. However, a deeper examination of the US and foreign evidence suggests that the theoretical underpinnings of the observed correlations are still largely unresolved.
JEL Classification: G32
Suggested Citation: Suggested Citation
Rajan, Raghuram G. and Zingales, Luigi, What Do We Know about Capital Structure? Some Evidence From International Data (July 1994). Available at SSRN: https://ssrn.com/abstract=5494