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Capital Structure Determinants An Empirical Study of Swedish Companies
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management.ORCID iD: 0000-0003-4849-0726
2005 (English)Report (Other academic)
Abstract [en]

This paper analysis the explanatory power of some of the theories that have been proposed in the literature to explain variations in capital structures across firms. In particular, this study investigates capital structure determinants of Swedish firms based on a panel data set from 1992 to 2000 comprising about 6000 companies. Swedish firms are on average very highly leveraged, and furthermore, short-term debt comprises a considerable part of Swedish firms’ total debt. An analysis of determinants of leverage based on total debt ratios may mask significant differences in the determinants of long and short-term forms of debt. Therefore, this paper studies determinants of total debt ratios as well as determinants of short-term and long-term debt ratios. The results indicate that most of the determinants of capital structure suggested by capital structure theories appear to be relevant for Swedish firms. But we also find significant  ifferences in the determinants of long and short-term forms of debt. Due to data limitations, it was not possible decompose short-term debt and long-term debt into its elements, but the results suggest that future analysis of capital choice decisions should be based on a more detailed level.

Place, publisher, year, edition, pages
KTH Royal Institute of Technology, 2005. , 25 p.
Series
CESIS Working Paper Series in Economics and Institutions of Innovation, 25
Keyword [en]
Capital Structure Sweden
National Category
Economics Business Administration
Identifiers
URN: urn:nbn:se:kth:diva-104595OAI: oai:DiVA.org:kth-104595DiVA: diva2:565199
Note

QC 20121119

Available from: 2012-11-19 Created: 2012-11-06 Last updated: 2012-11-19Bibliographically approved

Open Access in DiVA

fulltext(185 kB)