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Political Risk in Multinational Corporations’ Capital Structure: Evidence from Singapore
Umeå University, Faculty of Social Sciences, Umeå School of Business.
Umeå University, Faculty of Social Sciences, Umeå School of Business.
2011 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

In this paper, we examine the relationship between political risk as an international environmental determinant of capital structure as well as other factors that contribute to capital structure including leverage, foreign exchange risk, agency costs of debt, and collateral value of assets. We conducted this research on a sample of 200 Singaporean, non-financial, listed domiciled multinational firms over the period of 2005 to 2009. The results suggest that political risk is irrelevant to the multinational capital structure, foreign exchange risk, agency costs of debt, and (netted) collateral value of assets. We find that the results remain unchanged after controlling for size and industry. The findings produce evidence that foreign exchange risk, as another international factor is also irrelevant to the Singaporean multinational capital structure choice. Additionally, agency costs of debt and (netted) fixed assets have a negative association with leverage for Singaporean multinational corporations.

Place, publisher, year, edition, pages
2011. , 93 p.
Keyword [en]
capital structure, leverage, determinants, political risk, multinational corporations, Singapore
National Category
Business Administration
Identifiers
URN: urn:nbn:se:umu:diva-45273OAI: oai:DiVA.org:umu-45273DiVA: diva2:428347
Uppsok
Social and Behavioural Science, Law
Supervisors
Examiners
Available from: 2011-06-30 Created: 2011-06-30 Last updated: 2011-06-30Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • ieee
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  • vancouver
  • Other style
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  • de-DE
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Output format
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