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Firm-level determinants ofcapital structure : Dutch listed firms

Kolkman, T. (2019) Firm-level determinants ofcapital structure : Dutch listed firms.

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Abstract:This research investigates whether the firm-level determinants of the tradeoff theory and the pecking order theory can explain the capital structure of Dutch listed firms. The sample contains non-financial Dutch firms from the period 2013-2017. The data is gathered from Orbis. In total there are 224 firms included in the sample. The dependent variables are the long-term debt ratio and the total debt ratio. Ordinary least squares regression is used to analyze the data. The models who test the tradeoff theory found empirical evidence that tangibility and volatility are positively related to leverage. Profitability and non-debt tax shield are negatively related to leverage. The pecking order theory hypotheses found also empirical support. Profitability and liquidity are negatively related to leverage. Further, this research does not find evidence that there exists a financial hierarchy. Also, there is no support that the pecking order theory works better for firms with higher growth opportunities.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics, 85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/79841
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