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Hierarchical determinants of capital structure

  • Kayo, Eduardo K.
  • Kimura, Herbert
Registered author(s):

    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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    File URL: http://www.sciencedirect.com/science/article/B6VCY-50TRX5T-3/2/a32b38f8069746895969be589357b4cb
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    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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