IDEAS home Printed from https://ideas.repec.org/a/eee/ememar/v61y2024ics156601412400058x.html
   My bibliography  Save this article

The zero-debt puzzle in BRICS countries: Disentangling the financial flexibility and financial constraints hypotheses

Author

Listed:
  • Saona, Paolo
  • San-Martin, Pablo
  • Vallelado, Eleuterio

Abstract

This study analyzes the zero-debt decisions of BRICS firms using a bivariate probit model. The leading hypotheses are financial flexibility and financial constraints. On the demand-side, our findings reveal that managerial debt aversion, early lifecycle stage, growth opportunities, solvency, and concentrated ownership contribute to the lack of debt. Similarly, a country's institutional quality correlates with firms' debt-free status. On the supply-side, creditors fund companies with poor financial records in countries with robust markets and economic freedom. Financial flexibility and restrictions leading to zero debt are linked to firm and institutional characteristics in emerging countries.

Suggested Citation

  • Saona, Paolo & San-Martin, Pablo & Vallelado, Eleuterio, 2024. "The zero-debt puzzle in BRICS countries: Disentangling the financial flexibility and financial constraints hypotheses," Emerging Markets Review, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:ememar:v:61:y:2024:i:c:s156601412400058x
    DOI: 10.1016/j.ememar.2024.101163
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S156601412400058X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ememar.2024.101163?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hovakimian, Armen & Opler, Tim & Titman, Sheridan, 2001. "The Debt-Equity Choice," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 36(1), pages 1-24, March.
    2. Catherine C. Eckel & Cathleen Johnson & Claude Montmarquette & Christian Rojas, 2007. "Debt Aversion and the Demand for Loans for Postsecondary Education," Public Finance Review, , vol. 35(2), pages 233-262, March.
    3. Diamond, Douglas W, 1991. "Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 689-721, August.
    4. Klock, Mark S. & Mansi, Sattar A. & Maxwell, William F., 2005. "Does Corporate Governance Matter to Bondholders?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(4), pages 693-719, December.
    5. Meng, Chun-Lo & Schmidt, Peter, 1985. "On the Cost of Partial Observability in the Bivariate Probit Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(1), pages 71-85, February.
    6. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    7. Malcolm Baker & Jeremy C. Stein & Jeffrey Wurgler, 2003. "When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 969-1005.
    8. Denis, David J. & Mihov, Vassil T., 2003. "The choice among bank debt, non-bank private debt, and public debt: evidence from new corporate borrowings," Journal of Financial Economics, Elsevier, vol. 70(1), pages 3-28, October.
    9. Ilia D. Dichev, 2007. "What Are Stock Investors’ Actual Historical Returns? Evidence from Dollar-Weighted Returns," American Economic Review, American Economic Association, vol. 97(1), pages 386-401, March.
    10. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    11. Shigeo Takami, 2016. "Factors inhibiting Japanese firms from zero leverage: financial constraints and bank relationships," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(2), pages 161-176, June.
    12. repec:bla:jfinan:v:43:y:1988:i:1:p:1-19 is not listed on IDEAS
    13. Shleifer, Andrei & Vishny, Robert W, 1992. "Liquidation Values and Debt Capacity: A Market Equilibrium Approach," Journal of Finance, American Finance Association, vol. 47(4), pages 1343-1366, September.
    14. Cantillo, Miguel & Wright, Julian, 2000. "How Do Firms Choose Their Lenders? An Empirical Investigation," The Review of Financial Studies, Society for Financial Studies, vol. 13(1), pages 155-189.
    15. Baker, Malcolm & Wurgler, Jeffrey, 2013. "Behavioral Corporate Finance: An Updated Survey," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, volume 2, chapter 0, pages 357-424, Elsevier.
    16. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
    17. Chang, Chun & Yu, Xiaoyun, 2010. "Informational Efficiency and Liquidity Premium as the Determinants of Capital Structure," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 45(2), pages 401-440, April.
    18. Djankov, Simeon & McLiesh, Caralee & Shleifer, Andrei, 2007. "Private credit in 129 countries," Journal of Financial Economics, Elsevier, vol. 84(2), pages 299-329, May.
    19. Harris, Milton & Raviv, Artur, 1991. "The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
    20. Liu, Jiapeng & Tao, Qizhi & Hou, Wenxuan & Zhang, Ting, 2016. "Systematic risk, government policy intervention, and dynamic contrarian investments," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 334-343.
    21. de Jong, Abe & Kabir, Rezaul & Nguyen, Thuy Thu, 2008. "Capital structure around the world: The roles of firm- and country-specific determinants," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1954-1969, September.
    22. Lotfaliei, Babak, 2018. "Zero leverage and the value in waiting to have debt," Journal of Banking & Finance, Elsevier, vol. 97(C), pages 335-349.
    23. Murray Z. Frank & Vidhan K. Goyal, 2009. "Capital Structure Decisions: Which Factors Are Reliably Important?," Financial Management, Financial Management Association International, vol. 38(1), pages 1-37, March.
    24. Leland, Hayne E & Pyle, David H, 1977. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Journal of Finance, American Finance Association, vol. 32(2), pages 371-387, May.
    25. Bart M. Lambrecht & Stewart C. Myers, 2017. "The Dynamics of Investment, Payout and Debt," The Review of Financial Studies, Society for Financial Studies, vol. 30(11), pages 3759-3800.
    26. repec:eme:maj000:maj-05-2016-1374 is not listed on IDEAS
    27. Cline, Brandon N. & Williamson, Claudia R. & Xiong, Haoyang, 2021. "Culture and the regulation of insider trading across countries," Journal of Corporate Finance, Elsevier, vol. 67(C).
    28. Sadok El Ghoul & Omrane Guedhami & Chuck Kwok & Xiaolan Zheng, 2018. "Zero-Leverage Puzzle: An International Comparison," Review of Finance, European Finance Association, vol. 22(3), pages 1063-1120.
    29. Luca Grilli, 2005. "Internet start-ups access to the bank loan market: evidence from Italy," Applied Economics, Taylor & Francis Journals, vol. 37(3), pages 293-305.
    30. J B Heaton, 2002. "Managerial Optimism and Corporate Finance," Financial Management, Financial Management Association, vol. 31(2), Summer.
    31. Chang Suk Bae & Hae Jin Chung, 2022. "Zero-Leverage Puzzle Revisited: Evidence from Acquisition Behaviors," IJFS, MDPI, vol. 10(3), pages 1-27, August.
    32. John R. Graham, 2000. "How Big Are the Tax Benefits of Debt?," Journal of Finance, American Finance Association, vol. 55(5), pages 1901-1941, October.
    33. Baker, Malcolm & Stein, Jeremy C., 2004. "Market liquidity as a sentiment indicator," Journal of Financial Markets, Elsevier, vol. 7(3), pages 271-299, June.
    34. Joaquim Ferrão & José Dias Curto & Ana Paula Gama, 2016. "Low-leverage policy dynamics: an empirical analysis," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 15(4), pages 463-483, November.
    35. Thomas Meissner, 2016. "Intertemporal consumption and debt aversion: an experimental study," Experimental Economics, Springer;Economic Science Association, vol. 19(2), pages 281-298, June.
    36. Inessa Love, 2011. "Corporate Governance and Performance around the World: What We Know and What We Don't," The World Bank Research Observer, World Bank, vol. 26(1), pages 42-70, February.
    37. Yishay Yafeh & Oved Yosha, 2003. "Large Shareholders and Banks: Who Monitors and How?," Economic Journal, Royal Economic Society, vol. 113(484), pages 128-146, January.
    38. Stein, Jeremy C, 1996. "Rational Capital Budgeting in an Irrational World," The Journal of Business, University of Chicago Press, vol. 69(4), pages 429-455, October.
    39. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    40. Ben-Nasr, Hamdi & Boubaker, Sabri & Sassi, Syrine, 2021. "Board reforms and debt choice," Journal of Corporate Finance, Elsevier, vol. 69(C).
    41. Bessler, Wolfgang & Drobetz, Wolfgang & Haller, Rebekka & Meier, Iwan, 2013. "The international zero-leverage phenomenon," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 196-221.
    42. Altman, Edward I., 2005. "An emerging market credit scoring system for corporate bonds," Emerging Markets Review, Elsevier, vol. 6(4), pages 311-323, December.
    43. Malcolm Baker & Jeffrey Wurgler, 2002. "Market Timing and Capital Structure," Journal of Finance, American Finance Association, vol. 57(1), pages 1-32, February.
    44. Hackbarth, Dirk, 2009. "Determinants of corporate borrowing: A behavioral perspective," Journal of Corporate Finance, Elsevier, vol. 15(4), pages 389-411, September.
    45. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, April.
    46. Öztekin, Özde & Flannery, Mark J., 2012. "Institutional determinants of capital structure adjustment speeds," Journal of Financial Economics, Elsevier, vol. 103(1), pages 88-112.
    47. Laurence Booth & Varouj Aivazian & Asli Demirguc‐Kunt & Vojislav Maksimovic, 2001. "Capital Structures in Developing Countries," Journal of Finance, American Finance Association, vol. 56(1), pages 87-130, February.
    48. Gregory, Richard P., 2020. "Political risk and financial flexibility in BRICS countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 166-174.
    49. Ammara Yasmin & Abdul Rashid, 2019. "On the Mystery of Financial Conservatism: Insights from Pakistan," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(12), pages 2904-2927, September.
    50. Baker, Malcolm & Xuan, Yuhai, 2016. "Under new management: Equity issues and the attribution of past returns," Journal of Financial Economics, Elsevier, vol. 121(1), pages 66-78.
    51. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    52. Michael Faulkender & Mitchell A. Petersen, 2006. "Does the Source of Capital Affect Capital Structure?," The Review of Financial Studies, Society for Financial Studies, vol. 19(1), pages 45-79.
    53. David J. Denis & Stephen B. McKeon, 2012. "Debt Financing and Financial Flexibility Evidence from Proactive Leverage Increases," The Review of Financial Studies, Society for Financial Studies, vol. 25(6), pages 1897-1929.
    54. Zhang, Shage, 2016. "Institutional arrangements and debt financing," Research in International Business and Finance, Elsevier, vol. 36(C), pages 362-372.
    55. Kirch, Guilherme & Terra, Paulo Renato Soares, 2012. "Determinants of corporate debt maturity in South America: Do institutional quality and financial development matter?," Journal of Corporate Finance, Elsevier, vol. 18(4), pages 980-993.
    56. Paolo Saona & Pablo San Martín, 2018. "Determinants of firm value in Latin America: an analysis of firm attributes and institutional factors," Review of Managerial Science, Springer, vol. 12(1), pages 65-112, January.
    57. Vivien Lefebvre, 2021. "Zero-debt capital structure and the firm life cycle: empirical evidence from privately held SMEs," Venture Capital, Taylor & Francis Journals, vol. 23(4), pages 371-387, October.
    58. Khémiri, Wafa & Noubbigh, Hédi, 2018. "Determinants of capital structure: Evidence from sub-Saharan African firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 70(C), pages 150-159.
    59. Gugler, Klaus & Mueller, Dennis C. & Yurtoglu, B. Burcin, 2008. "Insider ownership, ownership concentration and investment performance: An international comparison," Journal of Corporate Finance, Elsevier, vol. 14(5), pages 688-705, December.
    60. Morais, Flávio & Serrasqueiro, Zélia & Ramalho, Joaquim J.S., 2020. "The zero-leverage phenomenon: A bivariate probit with partial observability approach," Research in International Business and Finance, Elsevier, vol. 53(C).
    61. Tatiana Dolgikh, 2017. "The IFRS Adoption by BRICS Countries: A Comparative Analysis," Springer Proceedings in Business and Economics, in: David Procházka (ed.), New Trends in Finance and Accounting, chapter 0, pages 373-383, Springer.
    62. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    63. Dang, Viet Anh, 2013. "An empirical analysis of zero-leverage firms: New evidence from the UK," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 189-202.
    64. Demirguc-Kunt, Asli & Maksimovic, Vojislav, 2002. "Funding growth in bank-based and market-based financial systems: evidence from firm-level data," Journal of Financial Economics, Elsevier, vol. 65(3), pages 337-363, September.
    65. Crisóstomo, Vicente Lima & López-Iturriaga, Félix Javier & Vallelado González, Eleuterio, 2014. "Nonfinancial companies as large shareholders alleviate financial constraints of Brazilian firm," Emerging Markets Review, Elsevier, vol. 18(C), pages 62-77.
    66. Machokoto, Michael & Chipeta, Chimwemwe & Aftab, Nadeem & Areneke, Geofry, 2021. "The financial conservatism of firms in emerging economies," Research in International Business and Finance, Elsevier, vol. 58(C).
    67. Andrea Gamba & Alexander Triantis, 2008. "The Value of Financial Flexibility," Journal of Finance, American Finance Association, vol. 63(5), pages 2263-2296, October.
    68. Harris, Milton & Raviv, Artur, 1990. "Capital Structure and the Informational Role of Debt," Journal of Finance, American Finance Association, vol. 45(2), pages 321-349, June.
    69. Mark T. Leary & Michael R. Roberts, 2005. "Do Firms Rebalance Their Capital Structures?," Journal of Finance, American Finance Association, vol. 60(6), pages 2575-2619, December.
    70. Jan Bena & Kai Li, 2014. "Corporate Innovations and Mergers and Acquisitions," Journal of Finance, American Finance Association, vol. 69(5), pages 1923-1960, October.
    71. Carver, Brian T. & Cline, Brandon N. & Hoag, Matthew L., 2013. "Underperformance of founder-led firms: An examination of compensation contracting theories during the executive stock options backdating scandal," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 294-310.
    72. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2000. "A New Database on the Structure and Development of the Financial Sector," The World Bank Economic Review, World Bank, vol. 14(3), pages 597-605, September.
    73. Arthur Korteweg, 2010. "The Net Benefits to Leverage," Journal of Finance, American Finance Association, vol. 65(6), pages 2137-2170, December.
    74. Denis, David J. & Sarin, Atulya, 2001. "Is the Market Surprised by Poor Earnings Realizations following Seasoned Equity Offerings?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 36(2), pages 169-193, June.
    75. Tang, Tony T., 2009. "Information asymmetry and firms' credit market access: Evidence from Moody's credit rating format refinement," Journal of Financial Economics, Elsevier, vol. 93(2), pages 325-351, August.
    76. Samargandi, Nahla & Kutan, Ali M. & Sohag, Kazi & Alqahtani, Faisal, 2020. "Equity market and money supply spillovers and economic growth in BRICS economies: A global vector autoregressive approach," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    77. Charles J. Hadlock & Joshua R. Pierce, 2010. "New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index," The Review of Financial Studies, Society for Financial Studies, vol. 23(5), pages 1909-1940.
    78. Strebulaev, Ilya A. & Yang, Baozhong, 2013. "The mystery of zero-leverage firms," Journal of Financial Economics, Elsevier, vol. 109(1), pages 1-23.
    79. Anthony, Joseph H. & Ramesh, K., 1992. "Association between accounting performance measures and stock prices : A test of the life cycle hypothesis," Journal of Accounting and Economics, Elsevier, vol. 15(2-3), pages 203-227, August.
    80. Hirshleifer, Jack, 1971. "The Private and Social Value of Information and the Reward to Inventive Activity," American Economic Review, American Economic Association, vol. 61(4), pages 561-574, September.
    81. Devos, Erik & Dhillon, Upinder & Jagannathan, Murali & Krishnamurthy, Srinivasan, 2012. "Why are firms unlevered?," Journal of Corporate Finance, Elsevier, vol. 18(3), pages 664-682.
    82. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    83. Zhen Huang & Wanli Li & Weiwei Gao, 2017. "Why do firms choose zero-leverage policy? Evidence from China," Applied Economics, Taylor & Francis Journals, vol. 49(28), pages 2736-2748, June.
    84. Michaelas, Nicos & Chittenden, Francis & Poutziouris, Panikkos, 1999. "Financial Policy and Capital Structure Choice in U.K. SMEs: Empirical Evidence from Company Panel Data," Small Business Economics, Springer, vol. 12(2), pages 113-130, March.
    85. Lai, Kam-Wah, 2011. "The cost of debt when all-equity firms raise sfinance: The role of investment opportunities, audit quality and debt maturity," Journal of Banking & Finance, Elsevier, vol. 35(8), pages 1931-1940, August.
    86. Saona, Paolo & Muro, Laura & Gregoriou, Andros, 2023. "The phenomenon of zero-leverage policy: Literature review," Research in International Business and Finance, Elsevier, vol. 66(C).
    87. Sharad Sharma & Mahesh Joshi & Monika Kansal, 2017. "IFRS adoption challenges in developing economies: an Indian perspective," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 32(4/5), pages 406-426, April.
    88. Beck, Thorsten & Levine, Ross, 2002. "Industry growth and capital allocation:*1: does having a market- or bank-based system matter?," Journal of Financial Economics, Elsevier, vol. 64(2), pages 147-180, May.
    89. Maria‐Teresa Marchica & Roberto Mura, 2010. "Financial Flexibility, Investment Ability, and Firm Value: Evidence from Firms with Spare Debt Capacity," Financial Management, Financial Management Association International, vol. 39(4), pages 1339-1365, December.
    90. Fan, Joseph P. H. & Titman, Sheridan & Twite, Garry, 2012. "An International Comparison of Capital Structure and Debt Maturity Choices," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 47(1), pages 23-56, February.
    91. Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, vol. 12(2), pages 209-217, February.
    92. Saona, Paolo & Vallelado, Eleuterio & San Martín, Pablo, 2020. "Debt, or not debt, that is the question: A Shakespearean question to a corporate decision," Journal of Business Research, Elsevier, vol. 115(C), pages 378-392.
    93. Cai, Lei & Rahman, Asheq & Courtenay, Stephen, 2014. "The Effect of IFRS Adoption Conditional Upon the Level of Pre-adoption Divergence," The International Journal of Accounting, Elsevier, vol. 49(2), pages 147-178.
    94. Dang, Viet Anh & Kim, Minjoo & Shin, Yongcheol, 2015. "In search of robust methods for dynamic panel data models in empirical corporate finance," Journal of Banking & Finance, Elsevier, vol. 53(C), pages 84-98.
    95. Timothy J. Brailsford & Barry R. Oliver & Sandra L. H. Pua, 2002. "On the relation between ownership structure and capital structure," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 42(1), pages 1-26, March.
    96. Yung, Kenneth & Li, DeQing Diane & Jian, Yi, 2015. "The value of corporate financial flexibility in emerging countries," Journal of Multinational Financial Management, Elsevier, vol. 32, pages 25-41.
    97. Matthew T. Billett & Tao‐Hsien Dolly King & David C. Mauer, 2007. "Growth Opportunities and the Choice of Leverage, Debt Maturity, and Covenants," Journal of Finance, American Finance Association, vol. 62(2), pages 697-730, April.
    98. Korajczyk, Robert A. & Levy, Amnon, 2003. "Capital structure choice: macroeconomic conditions and financial constraints," Journal of Financial Economics, Elsevier, vol. 68(1), pages 75-109, April.
    99. McConnell, John J. & Servaes, Henri, 1995. "Equity ownership and the two faces of debt," Journal of Financial Economics, Elsevier, vol. 39(1), pages 131-157, September.
    100. Ross Levine & Chen Lin & Lai Wei, 2017. "Insider Trading and Innovation," Journal of Law and Economics, University of Chicago Press, vol. 60(4), pages 749-800.
    101. Joaquim Ferrão & José Dias Curto & Ana Paula Gama, 2016. "Low-leverage policy dynamics: an empirical analysis," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 15(4), pages 463-483, November.
    102. Gatchev, Vladimir A. & Spindt, Paul A. & Tarhan, Vefa, 2009. "How do firms finance their investments?: The relative importance of equity issuance and debt contracting costs," Journal of Corporate Finance, Elsevier, vol. 15(2), pages 179-195, April.
    103. Alexander Plum, 2016. "bireprob: An estimator for bivariate random-effects probit models," Stata Journal, StataCorp LP, vol. 16(1), pages 96-111, March.
    104. Heywood, John S & Mohanty, Madhu S, 1994. "The Role of Employer and Workplace Size in the U.S. Federal Sector Job Queue," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(2), pages 171-188, May.
    105. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Morais, Flávio & Serrasqueiro, Zélia & Ramalho, Joaquim J.S., 2020. "The zero-leverage phenomenon: A bivariate probit with partial observability approach," Research in International Business and Finance, Elsevier, vol. 53(C).
    2. Bessler, Wolfgang & Drobetz, Wolfgang & Haller, Rebekka & Meier, Iwan, 2013. "The international zero-leverage phenomenon," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 196-221.
    3. Saona, Paolo & Vallelado, Eleuterio & San Martín, Pablo, 2020. "Debt, or not debt, that is the question: A Shakespearean question to a corporate decision," Journal of Business Research, Elsevier, vol. 115(C), pages 378-392.
    4. Morais, Flávio & Serrasqueiro, Zélia & Ramalho, Joaquim J.S., 2022. "Capital structure speed of adjustment heterogeneity across zero leverage and leveraged European firms," Research in International Business and Finance, Elsevier, vol. 62(C).
    5. Pindado, Julio & Requejo, Ignacio & Rivera, Juan C., 2017. "Economic forecast and corporate leverage choices: The role of the institutional environment," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 121-144.
    6. Elena Alexandra Nenu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2018. "The Impact of Capital Structure on Risk and Firm Performance: Empirical Evidence for the Bucharest Stock Exchange Listed Companies," IJFS, MDPI, vol. 6(2), pages 1-29, April.
    7. Mário Santos & António Moreira & Elisabete Vieira, 2014. "Ownership concentration, contestability, family firms, and capital structure," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(4), pages 1063-1107, November.
    8. Bigelli, Marco & Martín-Ugedo, Juan Francisco & Sánchez-Vidal, F. Javier, 2014. "Financial conservatism of private firms," Journal of Business Research, Elsevier, vol. 67(11), pages 2419-2427.
    9. Dang, Viet Anh, 2013. "An empirical analysis of zero-leverage firms: New evidence from the UK," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 189-202.
    10. San Martín, Pablo & Saona, Paolo, 2017. "Capital structure in the Chilean corporate sector: Revisiting the stylized facts," Research in International Business and Finance, Elsevier, vol. 40(C), pages 163-174.
    11. Michael Espindola Araki & Henrique Castro Martins, 2022. "Integrating uncertainty and governance into a capital structure puzzle: can risk-taking and rule-taking explain zero-leverage firms?," Review of Managerial Science, Springer, vol. 16(6), pages 1979-2034, August.
    12. Temimi, Akram & Zeitun, Rami & Mimouni, Karim, 2016. "How does the tax status of a country impact capital structure? Evidence from the GCC region," Journal of Multinational Financial Management, Elsevier, vol. 37, pages 71-89.
    13. Antonczyk, Ron Christian & Salzmann, Astrid Juliane, 2014. "Overconfidence and optimism: The effect of national culture on capital structure," Research in International Business and Finance, Elsevier, vol. 31(C), pages 132-151.
    14. Armanious, Amir & Zhao, Ruoyun, 2024. "Stock liquidity effect on leverage: The role of debt security, financial constraint, and risk around the global financial crisis and Covid-19 pandemic," International Review of Financial Analysis, Elsevier, vol. 92(C).
    15. Sardo, Filipe & Serrasqueiro, Zélia & Armada, Manuel Rocha, 2024. "Is the zero-leverage policy a persistent phenomenon? Evidence from Portuguese SMEs," Research in International Business and Finance, Elsevier, vol. 69(C).
    16. Machokoto, Michael & Chipeta, Chimwemwe & Aftab, Nadeem & Areneke, Geofry, 2021. "The financial conservatism of firms in emerging economies," Research in International Business and Finance, Elsevier, vol. 58(C).
    17. Belkhir, Mohamed & Maghyereh, Aktham & Awartani, Basel, 2016. "Institutions and corporate capital structure in the MENA region," Emerging Markets Review, Elsevier, vol. 26(C), pages 99-129.
    18. ElBannan, Mona A., 2017. "Stock market liquidity, family ownership, and capital structure choices in an emerging country," Emerging Markets Review, Elsevier, vol. 33(C), pages 201-231.
    19. Uz Zaman, Qamar & Ehsan, Sadaf & Hassan, Mohammad Kabir & Javed, Muzhar & Ul Hassan, Syed Iftikhar, 2022. "Corporate Social Responsibility and Zero Leverage," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 56(1), pages 33-46.
    20. İbrahim Yarba & Z. Nuray Güner, 2020. "Leverage dynamics: Do financial development and government leverage matter? Evidence from a major developing economy," Empirical Economics, Springer, vol. 59(5), pages 2473-2507, November.

    More about this item

    Keywords

    Zero leverage; BRICS; Financial flexibility; Financial restrictions; Capital structure; Bivariate probit model;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ememar:v:61:y:2024:i:c:s156601412400058x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620356 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.