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Evolution of Capital Structure in East Asia: Corporate Inertia or Endeavours?

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Author Info
Driffield, Nigel () (Aston University)
Pal, Sarmistha () (Brunel University)

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Abstract

The present paper examines the capital structure adjustment dynamics of listed non-financial corporations in seven East Asian countries during 1994-2002. Compared to firms in the least affected countries, average leverages were much higher among firms in the worst affected countries while the average speeds of adjustment were lower. This general ranking is robust to various alternative specifications and sample selections. We argue that this pattern is closely linked to weaknesses in regulatory environment and lack of access to alternative sources of finance in the worst affected countries.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3426.

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Date of creation: Apr 2008
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Publication status: forthcoming in: Journal of the Royal Statistical Society (Series A)
Handle: RePEc:iza:izadps:dp3426

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Related research
Keywords: generalised methods of moments; capital structure dynamics; partial adjustment models; firm- and time-varying speed; inertia and endeavours;

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Find related papers by JEL classification:
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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