search query: @indexterm capital structure of companies / total: 353
reference: 20 / 353
| Author: | Mitton, T. |
| Title: | Why have debt ratios increased for firms in emerging markets? |
| Journal: | European Financial Management
2008 : JAN, VOL. 14:1, p. 127-151 |
| Index terms: | emerging markets finance development debt financing capital structure of companies companies international |
| Language: | eng |
| Abstract: | This paper examines trends in capital structure from 1980 to 2004 in a sample of more than 11,000 firms from 34 emerging markets. The average firm's market-value debt ratio (here as: db-r./db-rs.) rose by 15 percentage points over this quarter century. It is explored how this rise in leverage was influenced by firm-level factors and by the availability of debt financing at the country level. Among others, it is found that the increase in db-rs. can largely be attributed to changes in the characteristics of emerging market firms during the studied period. At the average firm level, the most significant determinants of capital structure (that is: size, profitability, asset tangibility, and growth opportunities), shifted all in the direction implying a higher optimal level of debt. At the country level, increased financial development within the country is associated with lower db-rs., but increased financial openness to foreign markets is associated with higher db-rs. |
SCIMA