Do Firms Adjust Toward Target Capital Structures? Some International Evidence PDF Download
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Author: Brian J. Clark
Publisher:
ISBN:
Category :
Languages : en
Pages : 59
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Book Description
In a sample of 26,395 firms from 40 countries, we find evidence in support of the dynamic trade-off theory for capital structure. Firms in every country of our sample partially adjust toward target capital structures. We show that legal, institutional, and other country-level factors explain about 16 percent of the variation in adjustment speed for the full sample and about one-third for developing countries. These factors, however, have significantly different effects for developing and developed countries. Strong creditor and shareholder rights are both associated with faster adjustment speed in developing nations while they have no explanatory power in developed nations. Financial market development and higher tax rates are also positively associated with adjustment speed in developing countries, but have the opposite effect in developed countries.
Author: Brian J. Clark
Publisher:
ISBN:
Category :
Languages : en
Pages : 59
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Book Description
In a sample of 26,395 firms from 40 countries, we find evidence in support of the dynamic trade-off theory for capital structure. Firms in every country of our sample partially adjust toward target capital structures. We show that legal, institutional, and other country-level factors explain about 16 percent of the variation in adjustment speed for the full sample and about one-third for developing countries. These factors, however, have significantly different effects for developing and developed countries. Strong creditor and shareholder rights are both associated with faster adjustment speed in developing nations while they have no explanatory power in developed nations. Financial market development and higher tax rates are also positively associated with adjustment speed in developing countries, but have the opposite effect in developed countries.
Author: Gordon Donaldson
Publisher: Beard Books
ISBN: 9781587980343
Category : Business & Economics
Languages : en
Pages : 316
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Book Description
Author: Viet Anh Dang
Publisher:
ISBN:
Category :
Languages : en
Pages : 55
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Book Description
We employ dynamic threshold partial adjustment models to study the asymmetries in firms' adjustments toward their target leverage. Using a sample of US firms over the period 2002-2012, we document a negative impact of the Global Financial Crisis on the speed of leverage adjustment. In our subperiod analysis, we find moderate evidence of cross-sectional heterogeneity in this speed, which seems more pronounced pre-crisis and provides little support for the financial constraint view. Over the pre-crisis period, more constrained firms, such as those with high growth, with large investment, of small size, and with volatile earnings, adjust their capital structures more quickly than their less constrained counterparts. These firms rely heavily on external funds to offset large financing deficits, suggesting that their higher adjustment speeds may be driven by lower adjustment costs that are shared with the transaction costs of accessing external capital markets. During the crisis, the speed of adjustment varies with the deviation from target leverage: only firms with sufficiently large deviations attempt to revert to the target, albeit slowly. Overall, our results provide new evidence of both cross-sectional and time-varying asymmetries in capital structure adjustments, which is consistent with the trade-off theory.
Author: Reena Aggarwal
Publisher: World Bank Publications
ISBN:
Category : Foreign exchange
Languages : en
Pages : 47
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Author: Christopher Parsons
Publisher: Now Publishers Inc
ISBN: 160198202X
Category : Business & Economics
Languages : en
Pages : 107
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Book Description
Empirical Capital Structure reviews the empirical capital structure literature from both the cross-sectional determinants of capital structure as well as time-series changes.
Author: Ronald W. Masulis
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 168
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Author: Mr.Ari Aisen
Publisher: International Monetary Fund
ISBN: 1455211907
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
The purpose of this paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, we find that higher degrees of political instability are associated with lower growth rates of GDP per capita. Regarding the channels of transmission, we find that political instability adversely affects growth by lowering the rates of productivity growth and, to a smaller degree, physical and human capital accumulation. Finally, economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect.
Author: Benjamin M. Friedman
Publisher: University of Chicago Press
ISBN: 0226264238
Category : Business & Economics
Languages : en
Pages : 404
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Book Description
The research reported in this volume represents the second stage of a wide-ranging National Bureau of Economic Research effort to investigate "The Changing Role of Debt and Equity in Financing U.S. Capital Formation." The first group of studies sponsored under this project, which have been published individually and summarized in a 1982 volume bearing the same title (Friedman 1982), addressed several key issues relevant to corporate sector behavior along with such other aspects of the evolving financial underpinnings of U.S. capital formation as household saving incentives, international capital flows, and government debt management. In the project's second series of studies, presented at the National Bureau of Economic Research conference in January 1983 and published here for the first time along with commentaries from that conference, the central focus is the financial side of capital formation undertaken by the U.S. corporate business sector. At the same time, because corporations' securities must be held, a parallel focus is on the behavior of the markets that price these claims.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :
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I report that most cross-sectional deviations in international capital structure are caused by the heterogeneities of firm-, industry, and country-specific determinants rather than the influence of legal-institutional differences such as legal environment. In particular, most variations in international capital structure originate in the heterogeneity of firm-specific characteristics. Although the legal environment representing creditor protection could explain some differences in international capital structure, this evidence is at best only suggestive. However, the legal system, in general, seems to have a rather indirect effect on firm leverage through a conduit of firm characteristics. I do not find clear evidence to support that the indirect influence of the legal environments on leverage behavior is identifiable enough to prove a meaningful interaction between macroeconomic situations and the quality of legal protection underlying legal classification. If the heterogeneities at the level of firm, industry, and country levels are controlled for, the English common-law countries surprisingly appear to rely highly on debt-leverage, whereas the German civil-law countries are likely to be least levered. This finding is contrary to a "received wisdom" associated with international capital structure. The heterogeneities appear to be related to a sample bias inherent in international databases. In particular, collateral value of assets, firm size, and debt-related tax shield benefit are generally, viewed as the most influential factors in determining corporate leverage decision. Most of the variations in international capital structure can be ascribed to the heterogeneity of firm characteristics, rather than the macro economic factors once unobserved heterogeneous time-variant effects are taken into account. The stylized relationships between firm-specific determinants and leverage ratios are not valid across international capital structure over time. I also find significant difference in the speed of convergence of actual capital structure toward target level across different legal environment under a dynamic setting. Thus, legal factors seem to play a significant role in deciding the speed of adjustment in leverage. Key Words: International Capital Structure, Firm Heterogeneity, Legal Origins, OECD Countries.
Author: Alison Green
Publisher: Ballantine Books
ISBN: 0399181822
Category : Business & Economics
Languages : en
Pages : 306
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Book Description
From the creator of the popular website Ask a Manager and New York’s work-advice columnist comes a witty, practical guide to 200 difficult professional conversations—featuring all-new advice! There’s a reason Alison Green has been called “the Dear Abby of the work world.” Ten years as a workplace-advice columnist have taught her that people avoid awkward conversations in the office because they simply don’t know what to say. Thankfully, Green does—and in this incredibly helpful book, she tackles the tough discussions you may need to have during your career. You’ll learn what to say when • coworkers push their work on you—then take credit for it • you accidentally trash-talk someone in an email then hit “reply all” • you’re being micromanaged—or not being managed at all • you catch a colleague in a lie • your boss seems unhappy with your work • your cubemate’s loud speakerphone is making you homicidal • you got drunk at the holiday party Praise for Ask a Manager “A must-read for anyone who works . . . [Alison Green’s] advice boils down to the idea that you should be professional (even when others are not) and that communicating in a straightforward manner with candor and kindness will get you far, no matter where you work.”—Booklist (starred review) “The author’s friendly, warm, no-nonsense writing is a pleasure to read, and her advice can be widely applied to relationships in all areas of readers’ lives. Ideal for anyone new to the job market or new to management, or anyone hoping to improve their work experience.”—Library Journal (starred review) “I am a huge fan of Alison Green’s Ask a Manager column. This book is even better. It teaches us how to deal with many of the most vexing big and little problems in our workplaces—and to do so with grace, confidence, and a sense of humor.”—Robert Sutton, Stanford professor and author of The No Asshole Rule and The Asshole Survival Guide “Ask a Manager is the ultimate playbook for navigating the traditional workforce in a diplomatic but firm way.”—Erin Lowry, author of Broke Millennial: Stop Scraping By and Get Your Financial Life Together
