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Determinants of capital structure complexity

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  • Orlova, Svetlana
  • Harper, Joel T.
  • Sun, Li

Abstract

While capital structure is usually presented in the context of a choice between debt and equity, even within these choices we observe different sources of capital, especially related to debt. Recent studies have arrived at differing conclusions regarding the reliance upon different sources for capital and regarding the importance of those sources. We find that the complexity of capital structure is related to the need for external capital, access to debt markets and the capacity for additional borrowing. Each of these determinants has a unique impact on capital structure complexity; however, access to capital markets serves as a mitigating factor in capital structure complexity for those firms with a financial deficit.

Suggested Citation

  • Orlova, Svetlana & Harper, Joel T. & Sun, Li, 2020. "Determinants of capital structure complexity," Journal of Economics and Business, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:jebusi:v:110:y:2020:i:c:s0148619519302887
    DOI: 10.1016/j.jeconbus.2020.105905
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    References listed on IDEAS

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    Cited by:

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    3. Muhammd Istan, 2024. "Analysis of the Influence of Assets Structure, Earning Volatility, and Financial Flexibility on Capital Structure and Corporate Performance in Manufacturing Sector Companies on the IDX," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 49-65.
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    More about this item

    Keywords

    Capital structure complexity; External capital; Capital markets access;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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