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The determinants of capital structure choice: evidence from Greek listed companies

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  • A. Noulas
  • G. Genimakis

Abstract

This article investigates the capital structure determination of firms listed on the Athens Stock Exchange, using both cross-sectional and nonparametric statistics. The data set is mainly composed of balance sheet data for 259 firms over a 9-year period from 1998 to 2006, excluding firms from the banking, finance, real estate and insurance sectors. The first part of the study assesses the extent to which leverage depends upon a broader set of capital structure determinants, while the latter provides evidence that capital structure varies significantly across a series of firm classifications. The results document empirical regularities with respect to alternative measures of debt that are consistent with existing theories and, in particular, reasonably support the pecking order hypothesis. Overall, this study tries to shed more light on corporate financing behaviour in a way to loosen the capital structure puzzle.

Suggested Citation

  • A. Noulas & G. Genimakis, 2011. "The determinants of capital structure choice: evidence from Greek listed companies," Applied Financial Economics, Taylor & Francis Journals, vol. 21(6), pages 379-387.
  • Handle: RePEc:taf:apfiec:v:21:y:2011:i:6:p:379-387 DOI: 10.1080/09603107.2010.532108
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    Cited by:

    1. Krishnankutty, Raveesh & Chakraborty, Kiran Shankar, 2013. "Determinants of debt capital in Indian corporate sector: a quantile regression analysis," MPRA Paper 48307, University Library of Munich, Germany.
    2. Apostolos Dasilas & Nicolas Papasyriopoulos, 2015. "Corporate governance, credit ratings and the capital structure of Greek SME and large listed firms," Small Business Economics, Springer, vol. 45(1), pages 215-244, June.
    3. Alves, Paulo & Francisco, Paulo, 2015. "The impact of institutional environment on the capital structure of firms during recent financial crises," The Quarterly Review of Economics and Finance, Elsevier, vol. 57(C), pages 129-146.
    4. M. E. Bontempi & L. Bottazzi & R. Golinelli, 2015. "Dynamic corporate capital structure behavior: empirical assessment in the light of heterogeneity and non stationarity," Working Papers wp988, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. repec:ris:joefas:0108 is not listed on IDEAS
    6. ManYing Kang & Marcel Ausloos, 2017. "An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies," Papers 1712.00602, arXiv.org.
    7. Stavros H. Arvanitis & Irakleia S. Tzigkounaki & Theodoros V. Stamatopoulos & Eleftherios I. Thalassinos, 2012. "Dynamic Approach of Capital Structure of European Shipping Companies," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 5(3), pages 33-63, December.
    8. Nirosha Hewa Wellalage & Stuart Locke, 2013. "Capital structure and its determinants in New Zealand firms," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 14(5), pages 852-866, November.
    9. AVIRAL Kumar Tiwari & RAVEESH Krishnankutty, 2015. "Determinants Of Capital Structure: A Quantile Regression Analysis," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 10(1), pages 16-34, April.
    10. Khaled Hussainey & Khaled Aljifri, 2012. "Corporate governance mechanisms and capital structure in UAE," Journal of Applied Accounting Research, Emerald Group Publishing, vol. 13(2), pages 145-160, September.

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