Capital Structure Determinants for Emerging Markets by Geographic Region

Document Type


Department or Administrative Unit

Finance and Supply Chain Management

Publication Date



Finance theory suggests that firms should choose a capital structure that maximizes owner wealth and a plethora of research has sought to identify factors which influence the debt/equity choice. The bulk of this research has been limited to developed countries with little interest towards developing or emerging market firms. This study examines cross-regional similarities in capital structure determinants in an attempt to determine if any of the factors found to be significantly influential in developed markets are also important in emerging markets and are they region-specific. The specific countries of interest are: India, Indonesia, Korea (Rep), Malaysia, Thailand, Argentina, Brazil, Chile, Mexico, and Peru. These countries lie primarily in two distinct regions of the world; five in Asia and five in Latin America. Results show that emerging market factors are similar to those identified in developed markets but there are indeed regional differences.


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

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Journal of Applied Financial Research