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Capital Structure Across Industries

Author

Listed:
  • Magnus Talberg
  • Christian Winge
  • Stein Frydenberg
  • Sjur Westgaard

Abstract

The purpose of this article is to examine the capital structure across different industries for companies quoted on a stock exchange and headquartered in the United States. The paper demonstrates significant difference in the capital structure depending on the industry where the company operates. The debt ratio sensitivities to the explanatory variables differ significantly between the five industries studied. Almost every significant coefficient obtained in our regressions is in accordance with capital structure theory and other studies. Debt ratio is negatively related to profitability, growth, and age, while asset structure and company size are positively related. However, the debt ratio of the 50 largest companies in the sample is negatively related to company size, which gives support to a currency hedging hypothesis.

Suggested Citation

  • Magnus Talberg & Christian Winge & Stein Frydenberg & Sjur Westgaard, 2008. "Capital Structure Across Industries," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 15(2), pages 181-200.
    • Handle: RePEc:taf:ijecbs:v:15:y:2008:i:2:p:181-200
    DOI: 10.1080/13571510802134304
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    17. M N, Nikhil & S Shenoy, Sandeep & Chakraborty, Suman & B M, Lithin, 2023. "Does the Ind AS moderate the relationship between capital structure and firm performance?," MPRA Paper 119541, University Library of Munich, Germany, revised 15 Oct 2023.
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    19. Milan Hrdý, 2023. "A More Detailed Analysis of Branch Standards in Terms of Debt Distribution and Target Capital Structure [Podrobnější analýza oborových standardů z hlediska rozložení zadlužení a cílová kapitálová s," Oceňování, Prague University of Economics and Business, vol. 16(1-2), pages 27-39.
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