Business Commons^™

Have We Resolved The Issues Related To International Capital Structure? Empirical Evidence From The Oecd Countries, Joon-Young Song

Doctoral Dissertations

I report that most cross-sectional deviations in international capital structure are caused by the heterogeneities of firm-, industry, and country-specific determinants rather than the influence of legal-institutional differences such as legal environment. In particular, most variations in international capital structure originate in the heterogeneity of firm-specific characteristics. Although the legal environment representing creditor protection could explain some differences in international capital structure, this evidence is at best only suggestive. However, the legal system, in general, seems to have a rather indirect effect on firm leverage through a conduit of firm characteristics. I do not find clear evidence to support that …