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Inflation and Capital Structure

Author

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  • Jose Noguera

    (CERGE-EI)

Abstract

This essay is a contribution to the empirical literature on the effect of inflation tax on capital structure. A simple empirical model considering the main results of the current theoretical development is studied, using microdata from a number of American corporations.

Suggested Citation

  • Jose Noguera, 2001. "Inflation and Capital Structure," Finance 0111001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0111001
    Note: Type of Document - Acrobat PDF; pages: 15
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/fin/papers/0111/0111001.pdf
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    References listed on IDEAS

    as
    1. Hodder, James E & Senbet, Lemma W, 1990. "International Capital Structure Equilibrium," Journal of Finance, American Finance Association, vol. 45(5), pages 1495-1516, December.
    2. Dokko, Yoon, 1989. "Are Changes in Inflation Expectations Capitalized into Stock Prices? A Micro-firm Test for the Nominal Contracting Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 309-317, May.
    3. DeAngelo, Harry & Masulis, Ronald W., 1980. "Optimal capital structure under corporate and personal taxation," Journal of Financial Economics, Elsevier, vol. 8(1), pages 3-29, March.
    4. Kim, Moon K & Wu, Chunchi, 1988. "Effects of Inflation on Capital Structure," The Financial Review, Eastern Finance Association, vol. 23(2), pages 183-200, May.
    5. Franks, Julian R & Schwartz, Eduardo S, 1991. "The Stochastic Behaviour of Market Variance Implied in the Prices of Index Options," Economic Journal, Royal Economic Society, vol. 101(409), pages 1460-1475, November.
    6. Miller, Merton H, 1977. "Debt and Taxes," Journal of Finance, American Finance Association, vol. 32(2), pages 261-275, May.
    7. Kelly, William A, Jr & Miles, James A, 1989. "Capital Structure Theory and the Fisher Effect," The Financial Review, Eastern Finance Association, vol. 24(1), pages 53-73, February.
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    Cited by:

    1. Sakshi Khanna & Amit Srivastava & Yajulu Medury, 2015. "The Effect of Macroeconomic Variables on the Capital Structure Decisions of Indian Firms: A Vector Error Correction Model/Vector Autoregressive Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 968-978.

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    More about this item

    Keywords

    inflation tax; capital structure; firm value; debt-capital ratio;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • 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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