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The Impact of the Financial Crisis on the Determinants of Capital Structure : Evidence from Dutch Listed Firms

Muijs, W.K. (2015) The Impact of the Financial Crisis on the Determinants of Capital Structure : Evidence from Dutch Listed Firms.

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Abstract:This study has provided insights in the impact of the 2008 financial crisis on the relationships between firm-specific determinants and capital structure. Ordinary least squares (OLS) regression techniques have been used, analyzing data over a period from 2004 to 2013. The 2008 financial crisis was defined in this study as a five year period from 2008 to 2012, and referred to the subprime crisis and European sovereign debt crisis. The sample consists of 39 Dutch firms that are listed on the Euronext Amsterdam stock exchange. Five different firm-specific determinants have been examined; firm size, profitability, tangibility, growth and income volatility. Hypotheses have been formulated on the basis of these determinants, following the assumptions of the trade-off and pecking-order theory. Some significant relationships between firm specific determinants and the capital structure have been revealed, showing a small preference for the pecking order theory. Furthermore, some of these relations are affected by the crisis. The results also indicate that over the full sample period, the level of short-term debt is mostly influenced by a firm’s asset tangibility, while its long-term debt is mostly influenced by the firm’s size. Also a considerable rise in short-term and long-term debt was found in the starting year of the crisis.
Item Type:Essay (Bachelor)
Clients:
Unknown organization, Netherlands
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics, 85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/67498
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