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| Author: | Jong, A. de Dijk, R. van |
| Title: | Determinants of leverage and agency problems: A regression approach with survey data |
| Journal: | European Journal of Finance
2007 : JUL/SEP, VOL. 13:5-6, p. 565-593 |
| Index terms: | Netherlands surveys capital structure of companies corporate governance |
| Freeterms: | agency problems |
| Language: | eng |
| Abstract: | This paper reports on empirical investigations of the determinants of leverage and agency problems (hereafter as: l-and-agy-prbs). Used is private data collected via questionnaires, a regression model estimated with l-and-agy-prbs., that is, asset substitution, direct wealth transfer, underinvestment and overinvestment are explained. Based on a sample of Dutch firms, it is confirmed that the trade-off btw. tax advantages and bankruptcy costs determines leverage. Free cash flow and corporate governance characteristics seem to be determinants of overinvestment. Despite finding agency problems, there is no evidence found for direct relations btw. l-and-agy-prbs. |
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