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Hierarchical determinants of capital structure

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  • Kayo, Eduardo K.
  • Kimura, Herbert
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    Abstract

    We analyze the influence of time-, firm-, industry- and country-level determinants of capital structure. First, we apply hierarchical linear modeling in order to assess the relative importance of those levels. We find that time and firm levels explain 78% of firm leverage. Second, we include random intercepts and random coefficients in order to analyze the direct and indirect influences of firm/industry/country characteristics on firm leverage. We document several important indirect influences of variables at industry and country-levels on firm determinants of leverage, as well as several structural differences in the financial behavior between firms of developed and emerging countries.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 35 (2011)
    Issue (Month): 2 (February)
    Pages: 358-371

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    Handle: RePEc:eee:jbfina:v:35:y:2011:i:2:p:358-371

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    Web page: http://www.elsevier.com/locate/jbf

    Related research

    Keywords: Capital structure Hierarchical analysis Firm-level determinants Industry-level determinants Country-level determinants;

    References

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    Cited by:
    1. AulovaÌ, R. & Hlavsa, T., 2013. "Capital Structure of Agricultural Businesses and its Determinants," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 5(2), June.
    2. Sánchez-Vidal, F. Javier, 2014. "High debt companies' leverage determinants in Spain: A quantile regression approach," Economic Modelling, Elsevier, vol. 36(C), pages 455-465.
    3. Mihaela Brindusa TUDOSE, 2012. "Dimensions of the research on capital structure and firm performance," Anale. Seria Stiinte Economice. Timisoara, Faculty of Economics, Tibiscus University in Timisoara, vol. 0, pages 879-886, May.
    4. Saeed Fathi & Farzaneh Ghandehari & Sayyed Ya’ghoub Shirangi, 2014. "Comparative Study of Capital Structure Determinants in Selected Stock Exchanges of Developing Countries and Tehran Stock Exchange," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(1), pages 67-75, January.
    5. Alves, Paulo & Couto, Eduardo & Francisco, Paulo, 2014. "Board of directors’ composition and financing choices," MPRA Paper 52973, University Library of Munich, Germany, revised 2014.
    6. Hlavsa, T. & Aulová, R., 2013. "Analysis of the Effect of Legal Form and Size Group on the Capital Structure of Agricultural Businesses of Legal Entities," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 5(4), December.

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