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High debt companies' leverage determinants in Spain: A quantile regression approach

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  • Sánchez-Vidal, F. Javier
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    Abstract

    With a severe debt overhang problem in Spain, either public or private, the analysis of the factors that influence companies' leverage in this country reveals essential, in particular for the high-indebted firms. This study benefits from the quantile regression approach advantages over the OLS method to analyze the leverage determinants for a large sample of companies for the 2001–2011 period depending on their level of indebtedness. This method reveals that for the highly-leveraged companies many factors are no longer significant and that cash flow variable is crucial if the companies would like to decrease their debt levels.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economic Modelling.

    Volume (Year): 36 (2014)
    Issue (Month): C ()
    Pages: 455-465

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    Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:455-465

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    Web page: http://www.elsevier.com/locate/inca/30411

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    Keywords: Quantile regressions; Capital structure; High-debt companies;

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