The Evolution of Corporate Financial Structure: 1973–1990
Increases in corporate debt in a variety of countries over the past decade have renewed interest in the relationship between leverage and the macro-economy. In general, the theoretical work on these links has outpaced the empirical research. This paper is an initial attempt to examine changes in corporate financial structure in Australia over the past two decades. It explores the evolution of debt-asset ratios, interest cover ratios, dividend pay-out ratios and the ratio of trade credit to total debt, for a sample of 110 Australian firms, over the years 1973 to 1990. It examines changes in the across firm distribution of the ratios as well as changes in the average ratios. It also examines the relationship between the cyclicality of industry output and earnings on the one hand and the evolution of financial structure on the other.
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- Rama Seth, 1990.
"Leverage and cyclicality,"
9027, Federal Reserve Bank of New York.
- Ben Bernanke & Mark Gertler, 1990.
"Financial Fragility and Economic Performance,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 105(1), pages 87-114.
- Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1.
- Tim Callen & Steven Morling & Jill Pleban, 1992. "Dividends and Taxation: A Preliminary Investigation," RBA Research Discussion Papers rdp9211, Reserve Bank of Australia.
- Rama Seth, 1991. "Patterns of corporate leverage in selected industrialized countries," Research Paper 9107, Federal Reserve Bank of New York.
- Philip Lowe & Thomas Rohling, 1993. "Agency Costs, Balance Sheets and the Business Cycle," RBA Research Discussion Papers rdp9311, Reserve Bank of Australia.
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