Year: 2008
Type: article
Abstract: The availability of a unique data set of financially distressed firms enabled this study to apply the dynamic capital structure adjustment model to a study of capital structure. In addition, the factors driving capital structure adjustment of financially distressed and of healthy firms were estimated. The results identified 13 significant variables, which included many macroeconomic variables previously not studied, thus evidence is produced of the impact of macroeconomic factors on capital structure for the first time. We also estimated the adjustment parameters using a new dynamic adjustment model applied to an unbalanced panel data set of distressed and healthy firms. It is found that the adjustment parameters are different in the short term and long term. These new findings add to the capital structure literature.
Authors: Mohamed Ariff, Taufiq Hassan, Shamsher Mohamad
Institutions: The University of Tokyo, Universiti Putra Malaysia
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
Funder: Universiti Putra Malaysia
OpenAlex ID: W1495956632