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Determinants of Capital Structure: Further Evidence from China

Seelanatha, Senarath Lalithananda (2010) Determinants of Capital Structure: Further Evidence from China. Economics, Management, and Financial Markets, 5 (4). pp. 106-126. ISSN 1842-3191

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Abstract

This paper aims to provide empirical evidence for the relationship between a firm’s choice of capital structure and its productive environment using three basic hypotheses: efficiency risk, franchise value and political power. It considers the impact of a firm’s relative efficiency, market share and industry concentration on capital structure decisions. It uses non-parametric data envelopment analysis (DEA) to measure the relative efficiency. We found evidence to support the franchise value hypothesis that predicted a negative relationship between leverage and the firms’ relative efficiency. It is also found relatively large firms in the industry tend to use a lower level of leverage

Item Type: Article
Uncontrolled Keywords: ResPubID20637, capital structure, relative efficiency, market structure, China, data envelopment analysis
Subjects: Faculty/School/Research Centre/Department > School of Accounting
FOR Classification > 1402 Applied Economics
SEO Classification > 9001 Financial Services
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Depositing User: VUIR
Date Deposited: 27 Mar 2012 04:56
Last Modified: 27 Mar 2012 04:56
URI: http://vuir.vu.edu.au/id/eprint/6918
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