Employing a large sample of 7246 firms across 38 economies from 2000 to 2013, we show positive relation between foreign institutional ownership (FIO) and firms' speed leverage adjustment. This is concentrated for over-leveraged that need decrease financial rebalance their capital structures. We validate our findings using 2SLS regression DiD estimation exploit the exogenous variations in FIO ge...

Purpose Recognizing the severity of COVID-19 on US economy, authors investigate behavior US-listed firms towards leverage speed adjustment (SOA) during pandemic. While prior evidence (based an international study) shows that firm increased pandemic leading to a higher SOA toward ratios, for same period reduced drastically. Yet there is dearth empirical studies firms' The fill this void. Design/...

The common approach in empirical capital structure research has been to study the determinants of optimal leverage by studying the association between observed leverage and a set of explanatory variables. This approach has two major shortcomings. First, the observed leverage need not necessarily be the optimal leverage. Second, the empirical analyses, being effectively non-dynamic, are unable t...

This paper studies the connection between CEO experience and Vietnamese listed firms’ capital adjustment behavior. In context of Vietnam, we find that experienced CEOs slow down speed obtaining desired ratio debt, after analyzing a sample 694 public companies from 2010 to 2019. pattern can be seen for both under- over-the-target enterprises when leverage is measured by book market value. Our fi...

This paper investigates whether leveraged and zero-leverage firms pursue or not a debt target level and, if so, how fast they adjust to that target. We also investigate the influence of firms’ policy on capital structure speed adjustment (SOA) changes with different financial systems, macroeconomic conditions, constraints flexibility levels. Using dynamic panel fractional estimator sample Europ...

Abstract Dynamic panel data regression models with fixed effects to account for unobserved heterogeneity are standard econometric tools. It is not until recently, however, that the problems involved when fitting such regressions leverage have been investigated. The main problem of extremely noisy, much more so than what can be accommodated using effects. present article seen as a reaction this....

This paper incorporates the cost of adjustment between observed and optimal leverage in explaining the variation in firm’s equity or bank-debt financing investments. Using a dynamic adjustment approach identifies the determinants to capital structure between different financial systems. In relation to firm sales U.K and U.S firms have 50-100 percent more equity financing than Swedish firms depe...

This paper studies the capital structure dynamics of central and eastern European firms to better understand the quantitative and qualitative development of financial systems in this region. The dynamic model used endogenises the target leverage as well as the adjustment speed towards these targets. It is applied to microeconomic data for 10 countries. We find that during the transition process...