Firm Complexity and Capital Structure: Evidence from Italian Diversified Firms |
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| Authors: | Daniele Monteforte Raffaele Staglianò |
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| Affiliation: | 1. Department of Business Sciences, University of Calabria, Rende, Italy;2. Groupe Sup de Co Montpellier Business School and Montpellier Research in Management, Montpellier, France |
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| Abstract: | This paper examines the links between product diversification, international diversification and capital structure for a panel of medium and large Italian firms. The results indicate that the interaction between these two dimensions of diversification strategy has a negative and significant impact on leverage. Furthermore, debt maturity analysis reveals that firms pursuing a simultaneous dual diversification strategy have, in particular, lower long‐term debt ratios. Our findings support the hypothesis that the complexity that comes from diversification reduces debt levels. Copyright © 2014 John Wiley & Sons, Ltd. |
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