Dynamics of Capital Structure: The Case of Korean Listed Manufacturing Companies
Abstractfirms is developed in this paper and results compared with the classical static model. This paper specifies and estimates the unobservable optimal capital structure using a wide range of observable determinants. Uunbalanced panel data of Korean listed firms for the period 1985 to 2002 is used in this study. In addition to identification and estimation of the effects of the determinants of capital structure and capital structure optimality, some Korea-specific features such as the structural break before and after the financial crisis, as well as affiliation to a chaebol business groups, are taken into account to verify whether the optimal capital structure was affected by the financial crisis or whether belonging to a chaebol has any effect, and if so, to what extent.
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Bibliographic InfoPaper provided by The Ratio Institute in its series Ratio Working Papers with number 93.
Length: 34 pages
Date of creation: 25 Apr 2006
Date of revision:
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Capital structure; debt; firm; panel data; adjustment; Korea;
Other versions of this item:
- Hyesung Kim & Almas Heshmati & Dany Aoun, 2006. "Dynamics of Capital Structure: The Case of Korean Listed Manufacturing Companies ," Asian Economic Journal, East Asian Economic Association, vol. 20(3), pages 275-302, 09.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-29 (All new papers)
- NEP-FIN-2006-04-29 (Finance)
- NEP-FMK-2006-04-29 (Financial Markets)
- NEP-SEA-2006-04-29 (South East Asia)
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