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Capital structure choice and financial market liberalization: evidence from New Zealand

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  • Glenn Boyle
  • Kelly Eckhold

Abstract

The extensive 1980's deregulation of New Zealand financial markets is exploited to provide a unique test of capital structure theory. Specifically, debt choices of New Zealand corporate firms during pre-reform (1982-1985) and post-reform (1986-1989) periods are analysed and compared. However, consistent with evidence from other countries, existing hypotheses are able to explain relatively little of the cross-sectional variation in either long- or short-term debt usage. More significantly, this lack of explanatory power is consistent across pre- and post-reform periods.

Suggested Citation

  • Glenn Boyle & Kelly Eckhold, 1997. "Capital structure choice and financial market liberalization: evidence from New Zealand," Applied Financial Economics, Taylor & Francis Journals, vol. 7(4), pages 427-437.
    • Handle: RePEc:taf:apfiec:v:7:y:1997:i:4:p:427-437
    DOI: 10.1080/096031097333547
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    References listed on IDEAS

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