Keywords
capital structure
Abstract
Using a standardized methodology, we empirically evaluate 55 proposed determinants of capital structure in terms of statistical significance, economic significance, and identification. We find that robust and economically important determinants of debt ratios are relatively few in number. Nevertheless, because each determinant relates to one of five market imperfections—taxes, distress costs, information asymmetry, agency costs, or supply frictions—we draw conclusions from the evidence as a whole regarding the explanatory power of different capital structure theories. We find greater support for pecking order theory and supply-related theories, with less support for traditional tradeoff theory and agency theory.
Original Publication Citation
Determinants of capital structure: An expanded assessment (with T. Fukui and R. Schonlau), 2023, Journal of Financial and Quantitative Analysis 58, 2446–2488.
BYU ScholarsArchive Citation
Fukui, Toshinori; Mitton, Todd; and Schonlau, Robert, "Determinants of Capital Structure: An Expanded Assessment" (2022). Faculty Publications. 9265.
https://scholarsarchive.byu.edu/facpub/9265
Document Type
Peer-Reviewed Article
Publication Date
2022
Publisher
Journal of Financial and Quantitative Analysis
Language
English
College
Marriott School of Business
Department
Finance
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