IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

What do we know about capital structure? Revisiting the impact of debt ratios on some firm-specific factors

Listed author(s):
  • E. C. Charalambakis
  • D. Psychoyios

We revisit the evidence on the effect of size, tangibility, profitability and growth opportunities on debt ratios using a large sample of the US and the UK firms and applying advanced estimation methods that are perfectly aligned with the panel data. We employ a double-censored Tobit estimator, a Fixed-Effect (FE) estimator, a model that accounts for cross-sectional and time-series dependence and a Fama--Macbeth regression, we find that the signs of size, tangibility, profitability and growth opportunities for the US firms are consistent with previous studies. As with the US evidence we show that size and tangibility are positively associated with leverage whereas profitability and growth opportunities are negatively associated with leverage for the UK firms. However, the impact of growth opportunities on leverage for UK firms is inconclusive. We conclude that size, tangibility, profitability and growth opportunities cannot explain the theoretical aspects of capital structure.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Taylor & Francis Journals in its journal Applied Financial Economics.

Volume (Year): 22 (2012)
Issue (Month): 20 (October)
Pages: 1727-1742

in new window

Handle: RePEc:taf:apfiec:v:22:y:2012:i:20:p:1727-1742
DOI: 10.1080/09603107.2012.676733
Contact details of provider: Web page:

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:taf:apfiec:v:22:y:2012:i:20:p:1727-1742. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.