IDEAS home Printed from https://ideas.repec.org/a/taf/apfiec/v22y2012i20p1727-1742.html
   My bibliography  Save this article

What do we know about capital structure? Revisiting the impact of debt ratios on some firm-specific factors

Author

Listed:
  • E. C. Charalambakis
  • D. Psychoyios

Abstract

We revisit the evidence on the effect of size, tangibility, profitability and growth opportunities on debt ratios using a large sample of the US and the UK firms and applying advanced estimation methods that are perfectly aligned with the panel data. We employ a double-censored Tobit estimator, a Fixed-Effect (FE) estimator, a model that accounts for cross-sectional and time-series dependence and a Fama--Macbeth regression, we find that the signs of size, tangibility, profitability and growth opportunities for the US firms are consistent with previous studies. As with the US evidence we show that size and tangibility are positively associated with leverage whereas profitability and growth opportunities are negatively associated with leverage for the UK firms. However, the impact of growth opportunities on leverage for UK firms is inconclusive. We conclude that size, tangibility, profitability and growth opportunities cannot explain the theoretical aspects of capital structure.

Suggested Citation

  • E. C. Charalambakis & D. Psychoyios, 2012. "What do we know about capital structure? Revisiting the impact of debt ratios on some firm-specific factors," Applied Financial Economics, Taylor & Francis Journals, vol. 22(20), pages 1727-1742, October.
    • Handle: RePEc:taf:apfiec:v:22:y:2012:i:20:p:1727-1742
    DOI: 10.1080/09603107.2012.676733
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09603107.2012.676733
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09603107.2012.676733?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.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Phuong Dung Thi Nguyen & Thanh Nhan Thi Do & Michael Joseph Dempsey, 2019. "The Determinants of Capital Structure: New Evidence from Listed Companies in Vietnam," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(6), pages 1587-1595.
    2. David Makanile & Pastory Dickson, 2022. "Determinants of lending behaviour of commercial banks in Tanzania," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(2), pages 260-269, March.
    3. Petrella, Lea & Raponi, Valentina, 2019. "Joint estimation of conditional quantiles in multivariate linear regression models with an application to financial distress," Journal of Multivariate Analysis, Elsevier, vol. 173(C), pages 70-84.
    4. Ahmed Sakr & Amina Bedeir, 2019. "Firm Level Determinants of Capital Structure: Evidence From Egypt," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(1), pages 68-85, January.
    5. Giorgio Barba Navaretti & Giacomo Calzolari & Gianmarco Ottaviano & Alberto Franco Pozzolo, 2019. "Capital Market Union and Growth Prospects for Small and Medium Enterprises," Development Working Papers 449, Centro Studi Luca d'Agliano, University of Milano.
    6. María del Carmen Valls Martínez & José Manuel Santos-Jaén & Rafael Félix Valls-Úbeda & Rafael Soriano Román, 2023. "COVID-19 and Public Health Spending; Effects on the Economic Sustainability of the Spanish Private Healthcare System," IJERPH, MDPI, vol. 20(2), pages 1-18, January.
    7. Julia KORALUN-BEREŹNICKA & Dorota CIOŁEK, 2018. "Industry and Size Effect in Profitability-Capital Structure Relation: Empirical Evidence from Poland," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 93-107, December.

    More about this item

    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:taf:apfiec:v:22:y:2012:i:20:p:1727-1742. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAFE20 .

    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.