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The dynamic model of partial adjustment of the capital structure: Meta-analysis and a case of Polish enterprises

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  • Natalia Nehrebecka

    (Warsaw University – Faculty of Economic Sciences, D³uga 44/50, 00-241 Warsaw, Poland. National Bank of Poland, Œwiêtokrzyska 11/21, 00-919 Warszawa)

  • Aneta Dzik-Walczak

    (Warsaw University – Faculty of Economic Sciences, D³uga 44/50, 00-241 Warsaw, Poland.)

Abstract

The impact of company characteristics on bank debt financing has always been a field of conflicts among economists (e.g. trade-off theory vs. pecking order theory). The aim of this study is to investigate the adjustment speed of the capital structure to the optimal one. It has been verified how both company characteristics and macroeconomic factors affect adjustments toward a leverage target. This study provides a systematic analysis of the empirical literature on the leverage by conducting a meta-analysis. In particular, the problem of publication selection bias is discussed. Our results indicate that there is an evidence of such publication selection. For Polish case, we have found that the estimation of coefficient for lagged leverage is equal to 58.45%. It means that companies adjust its current level of leverage to the optimal value at a rate of 41.55% per year, so they need 1.3 years to reduce half of the distance to the optimum leverage. In comparison with results obtained by other researchers, it is relatively high rate of adjustment.

Suggested Citation

  • Natalia Nehrebecka & Aneta Dzik-Walczak, 2018. "The dynamic model of partial adjustment of the capital structure: Meta-analysis and a case of Polish enterprises," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(1), pages 55-81.
    • Handle: RePEc:rfe:zbefri:v:36:y:2018:i:1:p:55-81
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    References listed on IDEAS

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    Cited by:

    1. Natalia Nehrebecka, 2018. "Sectoral risk assessment with particular emphasis on export enterprises in Poland," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 677-700.
    2. Feng-Li Lin, 2020. "Do DJIA Firms Reflect Stationary Debt Ratios?," Economies, MDPI, vol. 8(4), pages 1-19, September.
    3. Geyer-Klingeberg, Jerome & Hang, Markus & Rathgeber, Andreas, 2020. "Meta-analysis in finance research: Opportunities, challenges, and contemporary applications," International Review of Financial Analysis, Elsevier, vol. 71(C).

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    More about this item

    Keywords

    capital structure; leverage; partial adjustment; Polish companies; publication selection bias;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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