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Analysis of the debt structure: a comparative study between brazilian and american companies

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  • Ariádine de Freitas Silva
  • Mauricio Ribeiro do Valle

Abstract

This paper analyzed total and long term indebtedness of Brazilian and American companies pertaining to various sectors of economy, between 1999-2003. Besides the comparative study, some hypotheses about the determinants of corporate debt maturity structure, based on main authors' studies found in literature for companies from different countries, were tested using ordinary least squares (cross-sectional regressions). Also, a comparative analysis among the sectors was achieved using mean comparison tests. The results showed that Brazilian and American companies presented, respectively, a greater and increasing proportion of short and long term debts during the period. Relating to the long term debt, it was verified the superiority of American companies to the Brazilian ones. But, relating to the total debt, Brazilian companies showed they were higher indebted than the American ones. The regressions indicated that companies with a greater proportion of assets to be given as collateral, obtained greater levels of total and long term debts. There were also evidences that companies with higher profits and higher depreciation expenses tend to show both less long term and total indebtedness. Finally, it was verified that total debt is positively related to a company's size.

Suggested Citation

  • Ariádine de Freitas Silva & Mauricio Ribeiro do Valle, 2008. "Analysis of the debt structure: a comparative study between brazilian and american companies," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 12(1), pages 201-229.
    • Handle: RePEc:abg:anprac:v:12:y:2008:i:1:592
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