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Capital Structure, Macroeconomic Variables & Stock Returns. Evidence from Greece

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  • Panayiotis Artikis
  • Georgia Nifora

Abstract

This paper aims to investigate the impact that the capital structure of a firm has on its stock price performance. We apply regression analysis at a sample consisting of Greek listed non-financial companies over the period 1998-2009, both at the full sample level and at four leverage deciles. In doing so, we test if leverage is priced as a risk factor by constructing a leverage factor. The main contribution of our work is that we diversify capital structure studies by broadening the limited work that has been accomplished on the base of leverage as an explanatory variable of returns. Our findings show that the leverage risk factor contains significant information content and that it adds a considerable portion in the explanation of stock returns. Copyright International Atlantic Economic Society 2012

Suggested Citation

  • Panayiotis Artikis & Georgia Nifora, 2012. "Capital Structure, Macroeconomic Variables & Stock Returns. Evidence from Greece," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 18(1), pages 87-101, February.
    • Handle: RePEc:kap:iaecre:v:18:y:2012:i:1:p:87-101:10.1007/s11294-011-9334-z
    DOI: 10.1007/s11294-011-9334-z
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    Cited by:

    1. Deari Fitim & Matsuk Zoriana & Lakshina Valeriya, 2019. "Leverage And Macroeconomic Determinants: Evidence From Ukraine," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 14(2), pages 5-19, August.
    2. Nicko Albart & Bonar Marulitua Sinaga & Perdana Wahyu Santosa & Trias Andati, 2020. "The Controlling role of Ownership on Financial Performance and Capital Structure in Indonesia," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(3), pages 15-27, July.
    3. Jay Desai & Rajesh Desai, 2019. "Capital Structure As Determinant Of Financial Performance: Review Of Literature," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 8(4), pages 133-148.

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    More about this item

    Keywords

    Asset pricing; Fama-French; Leverage; Beta; Price earnings ratio; Book-to-market ratio; Size; Momentum; Market risk premium; Athens stock exchange; G11; G12; G32;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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