Heterogeneity in the Speed of Capital Structure Adjustment across Countries and over the Business Cycle

Research output: Journal contributionsJournal articlesResearchpeer-review

Standard

Heterogeneity in the Speed of Capital Structure Adjustment across Countries and over the Business Cycle. / Drobetz, Wolfgang; Schilling, Dirk C.; Schröder, Henning.
In: European Financial Management, Vol. 21, No. 5, 01.11.2015, p. 936-973.

Research output: Journal contributionsJournal articlesResearchpeer-review

Harvard

APA

Vancouver

Bibtex

@article{c43ce50716dd4c939a0a06ba81d92fcb,
title = "Heterogeneity in the Speed of Capital Structure Adjustment across Countries and over the Business Cycle",
abstract = "This study analyses the heterogeneity in the speed of capital structure adjustment. Using a doubly-censored Tobit estimator that accounts for mechanical mean reversion in leverage ratios, the speed of adjustment is 25% per year in a large international sample, supporting the economic relevance of the trade-off theory. Differences in the adjustment speed across financial systems are attributable to differences in the costs of adjustment. Macroeconomic and micro-level supply-side constraints also affect the dynamics of leverage. Firms adjust more slowly during recessions, and the business cycle effect on adjustment speed is most pronounced for financially constrained firms in market-based countries.",
keywords = "Business cycle, Capital structure, Dynamic panel methods, Institutional arrangements, Speed of adjustment, Management studies",
author = "Wolfgang Drobetz and Schilling, {Dirk C.} and Henning Schr{\"o}der",
note = "Publisher Copyright: {\textcopyright} 2015 John Wiley & Sons Ltd.",
year = "2015",
month = nov,
day = "1",
doi = "10.1111/eufm.12048",
language = "English",
volume = "21",
pages = "936--973",
journal = "European Financial Management",
issn = "1354-7798",
publisher = "Wiley-Blackwell Publishing Ltd.",
number = "5",

}

RIS

TY - JOUR

T1 - Heterogeneity in the Speed of Capital Structure Adjustment across Countries and over the Business Cycle

AU - Drobetz, Wolfgang

AU - Schilling, Dirk C.

AU - Schröder, Henning

N1 - Publisher Copyright: © 2015 John Wiley & Sons Ltd.

PY - 2015/11/1

Y1 - 2015/11/1

N2 - This study analyses the heterogeneity in the speed of capital structure adjustment. Using a doubly-censored Tobit estimator that accounts for mechanical mean reversion in leverage ratios, the speed of adjustment is 25% per year in a large international sample, supporting the economic relevance of the trade-off theory. Differences in the adjustment speed across financial systems are attributable to differences in the costs of adjustment. Macroeconomic and micro-level supply-side constraints also affect the dynamics of leverage. Firms adjust more slowly during recessions, and the business cycle effect on adjustment speed is most pronounced for financially constrained firms in market-based countries.

AB - This study analyses the heterogeneity in the speed of capital structure adjustment. Using a doubly-censored Tobit estimator that accounts for mechanical mean reversion in leverage ratios, the speed of adjustment is 25% per year in a large international sample, supporting the economic relevance of the trade-off theory. Differences in the adjustment speed across financial systems are attributable to differences in the costs of adjustment. Macroeconomic and micro-level supply-side constraints also affect the dynamics of leverage. Firms adjust more slowly during recessions, and the business cycle effect on adjustment speed is most pronounced for financially constrained firms in market-based countries.

KW - Business cycle

KW - Capital structure

KW - Dynamic panel methods

KW - Institutional arrangements

KW - Speed of adjustment

KW - Management studies

UR - http://www.scopus.com/inward/record.url?scp=84904518691&partnerID=8YFLogxK

U2 - 10.1111/eufm.12048

DO - 10.1111/eufm.12048

M3 - Journal articles

AN - SCOPUS:84904518691

VL - 21

SP - 936

EP - 973

JO - European Financial Management

JF - European Financial Management

SN - 1354-7798

IS - 5

ER -

DOI

Recently viewed

Publications

  1. Die Neuerfindung des Ökonomischen
  2. Performanceorientiertes Controlling
  3. PRB technologies in Germany
  4. Software gibt es doch
  5. Learning the hard way
  6. Captopril and its dimer captopril disulfide
  7. Responsivity
  8. The role of knowledge and information in innovation
  9. Determinants and effects of sustainable CEO compensation
  10. When to sample in an inaccessible landscape
  11. Trade-offs for healthy and sustainable diets in Europe
  12. Von Zahlenmustern zur vollständigen Induktion
  13. Nature’s contributions to people in mountains: A review
  14. Trade-offs across value-domains in ecosystem services assessment
  15. How does the context and design of participatory decision making processes affect their outcomes? Evidence from sustainable land management in global drylands
  16. Home and fear
  17. Zuwanderer in der Stadt
  18. Computer Simulations Then and Now
  19. Pivoting the Player
  20. Economies of scope in European railways
  21. Reichsstadt Frankfurt am Main
  22. A Systematic Review and Meta-analysis of the Impact of Mindfulness-Based Interventions on the Well-Being of Healthcare Professionals
  23. The World is Flat: Study Guide
  24. Playing with sound and gesture in digital audio games
  25. Demographischer Wandel und Daseinsgrundfunktionen
  26. From DIY avantgardism to icons of German New Wave:
  27. Artificial empathy in healthcare chatbots
  28. Unraveling the Complexity of U.S. Presidential Approval
  29. Memory Acts
  30. Morde in hellen Nächten
  31. Orte zum Wohlfühlen
  32. Affect, Attachment, and Passion
  33. "Das muss man umdrehen und dann passt es"
  34. Bionik
  35. Microstructure and thermal response of Mg-Sn alloys