Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2023 International Conference on Management Research and Economic Development
Series Vol. 18 , 13 September 2023
Open
Access | Article
Three Industry Characteristics Affecting Capital Structure: Review of Literature
* Author to whom correspondence should be addressed.
Abstract
This paper summarizes the literature that studies the impact of industry characteristics on capital structure, and focuses on three factors, namely, growth opportunities, tangibility and firm size. We find that most literature supports the following conclusions: growth opportunities are negatively correlated with leverage, tangible assets are positively correlated with leverage, and enterprise size is positively correlated with debt level. At the same time, we find some limitations in previous studies. For example, scholars generally use linear regression as research method, and focus more on developed countries rather than on developing countries. According to these current situations, we give several suggestions for future research directions.
Keywords
growth opportunities, tangibility, firm size
References
1. Billett, M. T., King, T. H. D., & Mauer, D. C. (2007). Growth opportunities and the choice of leverage, debt maturity, and covenants. The Journal of Finance, 62(2), 697-730.
2. Nha, B. D., Bich Loan, N. T., & Nhung, N. T. T. (2016). Determinants of capital structure choice: Empirical evidence from Vietnamese listed companies. Society and Economy, 38(1), 29-45.
3. Rajan, R. G., & Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. The Journal of Finance, 50(5), 1421-1460.
4. Huang, G. (2006). The determinants of capital structure: Evidence from China. China economic review, 17(1), 14-36.
5. Wiwattanakantang, Y. (1999). An empirical study on the determinants of the capital structure of Thai firms. Pacific-Basin Finance Journal, 7(3-4), 371-403.
6. Serghiescu, L., & Văidean, V. L. (2014). Determinant factors of the capital structure of a firm-an empirical analysis. Procedia Economics and Finance, 15, 1447-1457.
7. Kurshev, A., & Strebulaev, I. A. (2015). Firm size and capital structure. Quarterly Journal of Finance, 5(03), 1550008.
8. Titman, S., & Wessels, R. (1988). The determinants of capital structure choice. The Journal of Finance, 43(1), 1-19.
9. Shah, A., Hijazi, T., & Javed, A. Y. (2004). The determinants of capital structure of stock exchange-listed non-financial firms in Pakistan [with comments]. The Pakistan Development Review, 605-618.
10. Stewart C. Myers (1984). The Capital Structure Puzzle, on The Journal of Finance, Vol. XXXIX, No.3. July 1984.
11. Joon Chae (2005). Trading Volume, Information Asymmetry, and timing Information, on The Journal of Finance, Feb. 2005, Vol. 60, No.1 (Feb, 2005), pp. 413-442.
12. Kurshev, A., & Strebulaev, I. A. (2015). Firm size and capital structure. Quarterly Journal of Finance, 5(03), 1550008.
13. Eriotis, N., Vasiliou, D., & Ventoura‐Neokosmidi, Z. (2007). How firm characteristics affect capital structure: an empirical study. Managerial Finance.
14. Sanil, H. S., bin Noraidi, A. A. A., & Ramakrishnan, S. (2018). The Impact of Different Firm Sizes on Capital Structure Determinants Among Listed Consumer Product Firms In Malaysia. Journal of Economic Info, 5(2), 1-6.
15. Karadeniz, E., Kandır, S. Y., Iskenderoglu, O., & Onal, Y. B. (2011). Firm size and capital structure decisions: Evidence from Turkish lodging companies. International Journal of Economics and Financial Issues, 1(1), 1-11.
16. González, V. M., & González, F. (2012). Firm size and capital structure: Evidence using dynamic panel data. Applied Economics, 44(36), 4745-4754.
17. Akdal, S. (2011). How do firm characteristics affect capital structure? Some UK evidence. Some UK Evidence (March 3, 2011).
18. Mouamer, F. M. A. (2011). The determinants of capital structure of Palestine‐listed companies. The Journal of Risk Finance.
19. Fama, E. F., & French, K. R. (2002). Testing trade-off and pecking order predictions about dividends and debt. The review of financial studies, 15(1), 1-33.
20. Norden, L., & van Kampen, S. (2013). Corporate leverage and the collateral channel. Journal of Banking & Finance, 37(12), 5062-5072.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 2023 International Conference on Management Research and Economic Development
- ISBN (Print)
- 978-1-915371-79-9
- ISBN (Online)
- 978-1-915371-80-5
- Published Date
- 13 September 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/18/20230062
- Copyright
- 13 September 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited