The Financing of Transportation Firms Using Rail, Truck, Air and Ship to Test Capital Structure Theories

Authors

David Wilson, Brigham Young University
James Brau, Brigham Young University

Keywords

financing, transportation firms, capital structure theories

College

Marriott School of Management

Department

Finance

Abstract

Our project sought to test traditional theories of capital structure (e.g., Ang & Peterson, 1986, Rajan & Zingales, 1995, Titman, & Wessels, 1988 DeAngelo & Masulis,1980, Leland, 1994, and Modigliani & Miller, 1958) through the analysis of a naturally occurring experiment produced among various transportation industry sectors (i.e. rail, truck, air, ship). The transportation industry is novel because the four types of transportation methods all have the same objective – to move product from one place to the other (Carter, Rogers, & Choi, 2015, and Gelsomino, Mangiaracina, Perego, & Tumino, 2016) – while each sector faces unique governmental regulation. Their similarity in purpose and inconsistency in constraint enables us to evaluate whether or not sector specific constraints have an effect on optimal financing decisions.

Recommended Citation

Wilson, David and Brau, James (2019) "The Financing of Transportation Firms Using Rail, Truck, Air and Ship to Test Capital Structure Theories," Journal of Undergraduate Research: Vol. 2019: Iss. 2019, Article 134.
Available at: https://scholarsarchive.byu.edu/jur/vol2019/iss2019/134