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Capital structure around the world: The roles of firm- and country-specific determinants

  • de Jong, Abe
  • Kabir, Rezaul
  • Nguyen, Thuy Thu

We analyze the importance of firm-specific and country-specific factors in the leverage choice of firms from 42 countries around the world. Our analysis yields two new results. First, we find that firm-specific determinants of leverage differ across countries, while prior studies implicitly assume equal impact of firm-specific factors. Second, although we concur with the conventional direct impact of country-specific factors on the capital structure of firms, we show that there is an indirect impact because country-specific factors also influence the roles of firm-specific determinants of leverage.

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

Volume (Year): 32 (2008)
Issue (Month): 9 (September)
Pages: 1954-1969

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Handle: RePEc:eee:jbfina:v:32:y:2008:i:9:p:1954-1969
Contact details of provider: Web page: http://www.elsevier.com/locate/jbf

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