Do Tests of Capital Structure Theory Mean What They Say ?  

Oleh:

Strebulaev, Ilya A.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 62 no. 4 (Aug. 2007), page 1747-1788.
Topik: capital; studies; capital structure; financial leverage; tradeoff analysis; models; simulation
Fulltext: p 1747.pdf (266.95KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

In the presence of frictions, firms adjust their capital structure infrequently. As a consequence, in a dynamic economy the leverage of most firms is likely to differ from the "optimum" leverage at the time of readjustment. This paper explores the empirical implications of this observation. I use a calibrated dynamic trade - off model to simulate firms' capital structure paths. The results of standard cross - sectional tests on these data are consistent with those reported in the empirical literature. In particular, the standard interpretation of some test results leads to the rejection of the underlying model. Taken together, the results suggest a rethinking of the way capital structure tests are conducted.

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