DETERMINANTS OF CAPITAL STRUCTURE OF PUBLICLYTRADED COMPANIES IN LATIN AMERICA: AN EMPIRICAL STUDY CONSIDERING MACROECONOMIC AND INSTITUTIONAL FACTORS

Authors

  • Douglas Dias Bastos Faculdade Santa Marcelina
  • Wilson Toshiro Nakamura Universidade Presbiteriana Mackenzie
  • Leonardo Fernando Cruz Basso Universidade Presbiteriana Mackenzie

Keywords:

Capital structure, Panel data, Latin America, Firm-specific factors, Macroeconomic and institutional factors.

Abstract

Recent researches have been evidenced that specific country factors, as legal, institutional and economical environments influence the capital structure of the companies. The present study investigates the determinants of capital structure using panel data, for a sample of 388 companies belonging to the seven larger economies of Latin America (Mexico, Brazil, Argentina, Chile and Peru), in the period 2001-2006. Starting from six indicators of leverage ratio, it was evidenced that the firm-specific factors: current liquidity, profitability, market to book value and size, present the most significant results. The theory of pecking order seems to be the  one that best explains the obtained results. The results for macroeconomic and institutional factors were not so robust, but for the variable GDP growth, and at a lower degree for proxies about the relevance of the stock market, fiscal load and time of opening of a new business.

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Author Biographies

Douglas Dias Bastos, Faculdade Santa Marcelina

Mestre em Administração de Empresas pelo Programa de Pós-Graduação em Administração de Empresas da Universidade Presbiteriana Mackenzie (UPM). Professor do Departamento de Administração da Faculdade Santa Marcelina.

Wilson Toshiro Nakamura, Universidade Presbiteriana Mackenzie

Doutor em Administração pela Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo (FEA-USP). Professor do Programa de Pós-Graduação em Administração de Empresas da Universidade Presbiteriana Mackenzie (UPM).

Leonardo Fernando Cruz Basso, Universidade Presbiteriana Mackenzie

Doutor em Economia pelo Departament of Economics da New School of Social Research, EUA. Professor do Programa de Pós-Graduação em Administração de Empresas da Universidade Presbiteriana Mackenzie (UPM).

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Published

2009-10-23

Issue

Vol. 10 No. 6 (2009): Thematic Special Editon - Golden Jubilee of Modigliani & Miller

Section

Golden Jubilee of Modigliani & Miller

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