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| Author: | Ozkan, A. |
| Title: | Determinants of Capital Structure and Adjustment to Long Run Target: Evidence From UK Company Panel Data |
| Journal: | Journal of Business Finance and Accounting
2001 : JAN-MAR, VOL. 28:1-2, p. 175-198 |
| Index terms: | PANEL DATA CAPITAL STRUCTURE OF COMPANIES UNITED KINGDOM |
| Language: | eng |
| Abstract: | This paper examines the empirical determinants of borrowing decisions of firms and the role of adjustment process. A partial adjustment model is estimated by GMM estimation procedure using data for an unbalanced panel of 390 UK firms over the period of 1984-1996. The authors' results suggest that firms have long-term target borrowing ratios and they adjust to their target ratios relatively fast, which might suggest that the costs of being away from their target ratios are significant. The results also provide support for positive impact of size, and negative effects of growth opportunities, liquidity, profitability of firms and non-debt tax shields on the borrowing decisions of companies. |
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