View More View Less
  • 1 Ton Duc Thang University
Restricted access

This paper examines the impact of firm-specific and industry characteristics on capital structure during a sample period spanning from 2007 to 2013. We used panel regression with fixed effects and found strong evidence that capital structure is most affected by firm-specific factors such as tangibility, non-debt tax shields, liquidity, firm size, taxes paid, profitability, Tobin’s Q ratio, and growth assets. In addition, the empirical results indicate that firms operating in different industries have dissimilar capital structures.

  • Abor, J. (2008): Determinants of the Capital Structure of Ghanaian Firms. AERC Research Paper 176 African Economic Research Consortium. htth://www.aercafria.org/documents/RP176.PDF, accessed on 10 April 2014.

    • Search Google Scholar
    • Export Citation
  • Balakrishnan, S.Fox, I. (1993): Asset Specificity, Firm Heterogeneity and Capital Structure. Strategic Management Journal 14(1): 316.

    • Search Google Scholar
    • Export Citation
  • Barton, S.Sundaram. S. (1989): An Empirical Test of Stakeholder Theory Predictions of Capital. Financial Management 18(1): 3644.

  • Baskin, J. (1989): An Empirical Investigation of the Pecking Order Hypothesis. Financial Management 18(1): 2635.

  • Biger, N.Nguyen, N. V.Hoang, Q. (2008): The Determinants of Capital Structure: Evidence from Vietnam. International Finance Review 8: 307326.

    • Search Google Scholar
    • Export Citation
  • Bradley, M.Jarrel G.Kim, E. H. (1984): On the Existence of an Optimal Capital Structure: Theory and Evidence. Journal of Finance 39(3): 857880.

    • Search Google Scholar
    • Export Citation
  • Brush, C. (1992): Research on Women Business Owners: Past Trends, A New Perspective and Future Directions. Entrepreneurship Theory and Practice 16(4): 530.

    • Search Google Scholar
    • Export Citation
  • Castanias, R. (1983): Bankruptcy Risk, and Optimal Capital Structure. The Journal of Finance 38(5): 16171635.

  • Chirinko, R.Singha, A. (2000): Testing Static Trade-offagainst Pecking Order Models of Capital Structure: A Critical Comment. Journal of Financial Economics 58(3): 417425.

    • Search Google Scholar
    • Export Citation
  • DeAngelo, H.Masulis, R. (1980): Optimal Capital Structure under Corporate and Personal Taxation. Journal of Financial Economics 8(1): 329.

    • Search Google Scholar
    • Export Citation
  • Deesomsak, R.Paudyal, K.Pescetto, G. (2004): The Determinants of Capital Structure: Evidence from the Asia Pacific Region. Journal of Multinational Financial Management 14(4-5): 387405.

    • Search Google Scholar
    • Export Citation
  • Degryse, H.de Goeij, P.Kappert, K. (2012): The Impact of Firm and Industry Characteristics on Small Firm’s Capital Structure. Small Economics Business 38(4): 431437.

    • Search Google Scholar
    • Export Citation
  • Dimitrios, V.Nikolaos, E.Nikolaos, D. (2009): Testing the Pecking Order Theory: The Importance of Methodology. Qualitative Research in Financial Markets 1(2): 8596.

    • Search Google Scholar
    • Export Citation
  • Frank, M.Goyal, V. (2005): Trade-offand Pecking Order Theories of Debt. http://ssrn.com/ abstract=670543, accessed on 19 April 2014.

    • Search Google Scholar
    • Export Citation
  • Huang, G.Song, F. M. (2006): The Determinants of Capital Structure: Evidence from China. China Economic Review 17(1): 1436.

  • Jean, J. (2004): Determinants of Capital Structure of Chinese-Listed Companies. Journal of Business Research 57(12): 13411351.

  • Johnson, S. (1998): The Effect of Bank Debt on Optimal Capital Structure. Financial Management 27(1): 4756.

  • Kraus, A.Litzenberger, R. (1973): A State-Preference Model of Optimal Financial Leverage. Journal of Finance 28(4): 911922.

  • MacKay, P.Phillips, G. (2005): How Does Industry Affect Firm Financial Structure? The Review of Financial Studies 18(4): 14331466.

    • Search Google Scholar
    • Export Citation
  • Majluf, N. (1984): Corporate Financing And Investment Decisions When Firms Have Information Investors do not Have. Journal of Financial Economics 13(2): 187221.

    • Search Google Scholar
    • Export Citation
  • Marsh, P. (1982): The Choice between Equity and Debt: An Empirical Study. The Journal of Finance 37(1): 121144.

  • Mateev, M.Poutziouris, P.Ivanov, K. (2013): On the Determinants of SME Capital Structure in Central and Eastern Europe: A Dynamic Panel Analysis. Research in International Business and Finance 27(1): 2851.

    • Search Google Scholar
    • Export Citation
  • Michaelas, N.Chittenden, F.Poutziouris, P. (1999): Financial Policy and Capital Structure Choice in U.K. SMEs: Empirical Evidence from Company Panel Data. Small Business Economics 12(2): 113130.

    • Search Google Scholar
    • Export Citation
  • Modigliani, F.Miller, M. (1958): The Cost of Capital, Corporation Finance and the Theory of Investment. American Economic Review 48(3): 261275.

    • Search Google Scholar
    • Export Citation
  • Murinde, V.Agung, J.Mullineux, A. (2004): Patterns of Corporate Financing and Financial System Convergence in Europe. Review of International Economics 12(4): 693705.

    • Search Google Scholar
    • Export Citation
  • Myers, S. C. (1977): Determinants of Corporate Borrowing. Journal of Financial Economics 5(2): 147175.

  • Myers, S. C. (1984): The Capital Structure Puzzle. Journal of Finance 39(3): 574592.

  • Nguyen, D. T.Diaz-Rainey, I.Gregoriou, A. (2012). Financial Development and the Determinants of Capital Structure in Vietnam. http://ssrn.com/abstract=2014834, accessed on 20 April 2015.

    • Search Google Scholar
    • Export Citation
  • Nguyen, T. D. K.Ramachandran, N. (2006): Capital Structure in Small and Medium-Sized Enterprises: The Case of Vietnam. ASEAN Economic Bulletin 23(2): 192211.

    • Search Google Scholar
    • Export Citation
  • Ooi, J. (1999): The Determinant of Capital Structure: Evidence on UK Property Companies. Journal of Property Investment and Finance 17(5): 464480.

    • Search Google Scholar
    • Export Citation
  • Seifert, B.Gonenc, H. (2008): The International Evidence on the Pecking Order Hypothesis. Journal of Multinational Financial Management 18(3): 244260.

    • Search Google Scholar
    • Export Citation
  • Titman, S. (1984): The Effect of Capital Structure on A Firm’s Liquidation Decision. Journal of Financial Economics 13(1): 137151

  • Titman, S Wessels, R. (1988): The Determinants of Capital Structure Choice. Journal of Finance 43(1): 119.

  • Van der Wijst, N.Thurik, R. (1993): Determinants of Small Firm Debt Ratios – an Analysis of Retail Panel Data. Small Business Economics 5(1): 5565.

    • Search Google Scholar
    • Export Citation