Capital Structure Determinants in Emerging Markets

Document Type

Article

Department or Administrative Unit

Finance and Supply Chain Management

Publication Date

2010

Abstract

This research identifies differences in capital structure determinants for developed and emerging countries. As the global economy continues to develop and investment barriers between countries crumble, the importance of understanding emerging markets increases. These countries provide investors with another outlet for portfolio diversification and opportunities for industrialized nations to form valuable economic alliances. In order to more accurately assess the nature of investment in such countries, it is imperative that we understand as much as possible about the characteristics of financing decisions in these markets.

This study attempts to define determinants of capital structure in emerging market nations and examine how these may differ from capital structure determinants in developed countries. Commonly held factors affecting capital structure in industrialized nations in the context of emerging market nations is examined in an attempt to determine if these factors influence capital structure in emerging markets differently than in developed nations. The data used for this study is focused on companies from emerging market countries located in two regions: Latin America and Asia. Therefore, the study will focus on how the determinants of capital structure in the emerging markets are similar to those of industrialized countries.

Comments

This article was originally published in Journal of Applied Financial Research.

Journal

Journal of Applied Financial Research

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