Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure?
Journal Publication ResearchOnline@JCUAbstract
We investigate firm-level determinants of capital structure using a large sample of 4,284 Japanese firms over a 19-year period (i.e., over 61,000 firm-year observations), a hitherto less examined sample for this purpose. We conduct our analysis and interpret our findings predominantly within the pecking order, the trade-off and the agency theoretical frameworks. We uncover three new findings. First, our evidence indicates that insights derived from the extant literature on capital structure are cross-national and are applicable in the context of Japan, despite the unique characteristics of Japanese firms. Second, financial crisis significantly impacts the relationship between leverage and firm-level determinants, particularly accentuating the effect of asset tangibility and growth. Third, product market competition significantly impacts the observed relationship between firm-level determinants and leverage. Our results are robust, controlling for the joint effects of competition and crisis.
Journal
International Journal of Finance & Economics
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Volume
26
ISBN/ISSN
1099-1158
Edition
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Issue
4
Pages Count
20
Location
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Publisher
Wiley
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Publisher Location
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Publish Date
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Date
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EISSN
N/A
DOI
10.1002/ijfe.2055