Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104436
Authors: 
Kühnhausen, Fabian
Stieber, Harald W.
Year of Publication: 
2014
Series/Report no.: 
Munich Discussion Paper 2014-38
Abstract: 
In this paper, we evaluate firm-, industry- and country-specific factors determining a firm's capital structure. The empirical validity of several capital structure theories has been ambiguous so far. We shed light on the main drivers of leverage and depict differences in industry and country characteristics. Using a short panel data set with a large cross-section, we are able to show that firm size, industry leverage, industry growth and tax shield positively affect leverage ratios, while profitability and liquidity have negative impacts. Moreover, our model is an improvement over Rajan and Zingales' (1995) four-factor core model in terms of explaining data variation. The results are robust against different panel estimators, decompositions and over time.
Subjects: 
Capital Structure
Non-Financial Companies
Pecking Order Theory
Trade-off Theory
JEL: 
F36
G14
G15
G18
G32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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