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The relationship between capital structure and product market competition

Xu, Xiaomeng (2013) The relationship between capital structure and product market competition.

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Abstract:This thesis examines the impact of product market competition on capital structure of listed firms in the Netherlands during the period 2003-2011. Ordinary Least Squares (OLS) regression analysis is used to investigate this impact. The dependent variables used in the regressions are book leverage ratio and market leverage ratio whereas the independent variables include concentration ratio and R&D. We also control for firm size, growth opportunity, non-tax debt shield and tangibility. Industry types and years are two dummy variables. Statistically significant positive relationships between concentration ratio and both book value of long term debt ratio and market value of long term debt ratio are observed respectively. The finding indicates that the product market competition negatively influences capital structure. We also find no evidence of a relationship between R&D and capital structure. In terms of R&D, we can’t find the relationship between product market competition and capital structure.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/63946
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