Determinants of Corporate Capital Structure of Norwegian Manufacturing Firms

This study mainly aimed at examining the determinants of capital structure in Nepalese trading and manufacturing firms. The study has covered eleven major on-financial enterprises of trading and manufacturing firm’s specific variables. Firm’s size, growth opportunity, asset tangibility, profitability, firm’s age, liquidity and interest coverage ratio have selected as variables to examine their effect on corporate capital structure. The study used both descriptive and causal comparative research design to examine the determinants of capital structure. Data required for undertaking the study were collected from secondary sources. For each enterprise, financial data for 10 fiscal years covering the period of F/Y 2005/2006 to F/Y 2015/2016.The study concluded that asset tangibility, profitability, liquidity and interest coverage ratio are the major determinants of corporate capital structure in Nepalese trading and manufacturing firms.

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Credit supply and corporate capital structure: evidence from Pakistan

South Asian Journal of Global Business Research ◽

10.1108/sajgbr-03-2015-0029 ◽

2016 ◽

Vol 5 (2) ◽

pp. 250-267 ◽

Cited By ~ 2

Author(s):

Amjad Iqbal ◽

Tanveer Ahsan ◽

Xianzhi Zhang

Keyword(s):

Panel Data ◽

Capital Structure ◽

Dynamic Panel Data ◽

Manufacturing Firms ◽

Short Term ◽

Dynamic Panel ◽

Content Type ◽

Corporate Capital ◽

Credit Supply ◽

Corporate Capital Structure

Purpose – The purpose of this paper is to investigate the relevance of credit supply for corporate capital structure decisions of manufacturing firms in Pakistan. Design/methodology/approach – The implicit assumption in much of the work on capital structure is that for a firm, the availability of incremental capital depends solely on its characteristics. However, the capital market frictions suggest that suppliers of credit may also affect firms’ ability to borrow. The authors investigated this intuition by employing dynamic panel data estimators using 8,984 firm-year observations for the period 1990-2010. Findings – The results show that short-term debt is a major source of financing in these firms. Further, credit supply plays a significant role in these firms’ capital structure decisions and hence, they increase their short-term debt (main financing source) with an increase in credit supply in the market while payoff their long-term debt with internal funds. Practical implications – The findings of this study can enhance the practitioners’ and analysts’ understanding of capital structure of manufacturing firms in a bank dominated financial system, like Pakistan. Also, it can provide them more insight in understanding the alternative choices of financing and the reasons why firms prefer one over the other. Originality/value – To the authors’ best knowledge, this is the first study in Pakistan that considers both supply-side as well as demand-side factors of capital structure and applies dynamic panel data techniques.

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