Measurement matters – A meta-study of the determinants of corporate capital structure

This study aggregates the mixed empirical evidence of the seven most commonly investigated determinants of corporate capital structure. We apply meta-regression analysis on a data set of 3,890 reported results, manually collected from 100 primary studies. Our results reveal that − in descending order of importance − tangible assets (positive sign), market-to-book ratio (negative sign), and profitability (negative sign) are significant determinants of corporate debt level. In addition, we find evidence for publication selection bias in academic literature. Accordingly, specific results are systematically overrepresented, as authors prefer reporting statistically significant estimates in line with theory or existing empirical results. Significant determinants, as well as publication selection bias, are more pronounced for characteristics like market-based measures of capital structure, total debt measures of capital structure, and for top articles in highly renowned journals, compared to book-based measures of capital structure or long-term debt measures of capital structure or randomly selected articles including more unknown and unpublished studies.