Supply of capital and capital structure: The role of financial development |
| |
| Affiliation: | 1. Senior Concordia University Research Chair in Finance, John Molson School of Business, Concordia University, Montreal, QC H3G 1M8, Canada;2. John Molson School of Business, Concordia University, 1455 De Maisonneuve Blvd W., Montreal, Quebec H3G 1M8, Canada;1. Department of Finance, Peking University HSBC Business School, China;2. Department of Finance, The University of Illinois at Urbana–Champaign, USA;1. University of Arizona, Eller College of Management, 1130 East Helen St., Tucson, AZ 85721, United States;2. University of Kentucky, Gatton College of Business and Economics, 550 S Limestone, Lexington, KY 40506, United States;1. Bank of Sharjah Chair, American University of Sharjah, Sharjah, United Arab Emirates;2. Moore School of Business, University of South Carolina, 1014 Greene Street, Columbia, SC 29208, USA;3. School of Accounting and Finance, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong;1. Finance Department, NEOMA Business School, Rouen Campus, France;2. Finance Department, ESSEC Business School, Avenue Bernard Hirsch, B.P. 50105, 95021 Cergy-Pontoise Cedex, France |
| |
| Abstract: | We explore the effect of financial development on corporate capital structure and the tightness of financial constraints that firms face. We employ an econometric technique that allows us to explicitly test for convergence in capital structure. This technique increases the power of our statistical tests. In doing so, we identify a group of convergent firms. The driving force of convergence is financial development, which positively affects the firms' leverage ratio. We also identify a group of firms, whose leverage is not affected by financial development, because they are financially constrained. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
