Credit Market Segmentation and Capital Structure Stability

ABSTRACT Purpose: This paper’s objective is to analyze whether the capital structure of Brazilian publicly traded companies remained stable over the last twenty years. Originality/value: The paper is focused on the Brazilian capital market, in which there is a lack in the literature about the study of the leverage behavior and its immaturity, where factors related to the companies and characteristics in contracting leverage alter the demand of credit. Design/methodology/approach: To achieve its objective, initially a graphical analysis of market and book debt evolution was carried out, and a GMM-Sys regression model through panel data was estimated to identify the stability of leverage along time. Findings: The results indicate a reduction of the market leverage with higher statistical significance after 2008, indicating, both in the graphic and the regression analysis, that the use of debt was unstable in the first period analyzed (1995-2007), behavior not observed during the second period (2008-2015) when analyzed market measures in which capital structure stability was prevalent, with considerable reduction of corporate leverage, otherwise, book measures of leverage would have shown a stability trend in leverage patterns. The principal determinants of the capital structure were the tax benefits (book debt) and the size (market debt), supporting trade-off theory.

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Empirical Duration of Corporate Bonds and Credit Market Segmentation

The Journal of Fixed Income ◽

10.3905/jfi.2010.20.1.005 ◽

2010 ◽

Vol 20 (1) ◽

pp. 5-27 ◽

Cited By ~ 8

Author(s):

Madhur Ambastha ◽

Arik Ben Dor ◽

Lev Dynkin ◽

Jay Hyman ◽

Vadim Konstantinovsky

Keyword(s):

Market Segmentation ◽

Corporate Bonds ◽

Credit Market

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Empirical Duration of Corporate Bonds and Credit Market Segmentation

The Journal of Fixed Income ◽

10.3905/jfi.2010.2010.1.003 ◽

2010 ◽

pp. 100505053645099

Author(s):

Madhur Ambastha ◽

Arik Ben Dor ◽

Lev Dynkin ◽

Jay Hyman ◽

Vadim Konstantinovsky

Keyword(s):

Market Segmentation ◽

Corporate Bonds ◽

Credit Market

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Capital structure: Empirical evidences of public and non-public firms in Brazil

Corporate Ownership and Control ◽

10.22495/cocv12i3c2p2 ◽

2015 ◽

Vol 12 (3) ◽

pp. 223-232

Author(s):

Gabriel Hideo Sakai de Macedo ◽

Joelson Oliveira Sampaio ◽

Eduardo Flores ◽

Pedro Luiz Aprigio

Keyword(s):

Capital Structure ◽

Cash Flow ◽

Stock Exchange ◽

Credit Market ◽

Convertible Debt ◽

Short Term ◽

Private Companies ◽

Public Companies ◽

Public Firms

This study seek to contribute to the literature through research focused on companies listed and not listed on the stock exchange. A survey was used to identify the capital structure of Brazilian companies and relate the results to the Brazilian credit market. The results indicate that most of the investigated companies prefer not to issue convertible debt, as well as the share of firms issuing common shares was small. It was found that firms do not have preference between long-term and short-term debt. Finally, it was also noted that private companies have great concern about the volatility of earnings and cash flow. The differential of this research was to analyze the practices adopted by both public companies and privately held

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Analysis of capital structure stability of listed firms in China

China Finance Review International ◽

10.1108/cfri-05-2018-0044 ◽

2019 ◽

Vol 10 (2) ◽

pp. 213-228 ◽

Cited By ~ 4

Author(s):

Kelvin Henry Kyissima ◽

Gong Zhang Xue ◽

Thales Pacific Yapatake Kossele ◽

Ahmed Ramadhan Abeid

Keyword(s):

Panel Data ◽

Capital Structure ◽

Fixed Effects ◽

Structure Stability ◽

Individual Investors ◽

Content Type ◽

Corporate Managers ◽

Listed Firms ◽

Financing Decisions ◽

Corporate Capital Structure

Purpose The purpose of this paper is to analyze the corporate capital structure stability of listed firms in China during the period 1990–2013. Design/methodology/approach The study uses panel data from a sample of 716 firms that have been listed in China for at least 15 years. A fixed-effects panel data regression model with time effects is used in the estimation. Findings The findings show that size, profitability and investment opportunities have a significant influence on capital structure, whereas the tangibility of assets is not found to be significant. Few industries show significance in explaining differences and variation in leverage ratios. Social implications It is recommended by this study that corporate managers of listed firms in China should consider leverage ratios variation while choosing the capital structure. Originality/value This study can be helpful in assisting companies to make financing decisions and setting up strategies relevant in their growth and profitability. The study will also have a significant assistance to bring to light corporate issues to policy makers, especially in the areas of both equity and debt financing, particularly the bond market. To the society, this study will show the nature of Chinese-listed companies, and it can assist individual investors in making decisions regarding companies in which they hold investments and in making meaningful comparisons with other companies. The paper also aims at contributing to the existing literature on the empirical study on capital structure.

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