Capital Structure of Brazil, Russia, India and China by Economic Crisis

Authors

  • Edilson dos Santos Silva Centro Universitário Tiradentes
  • Josete Florencio dos Santos Universidade Federal de Pernambuco
  • Fernanda Finotti Cordeiro Perobelli Universidade Federal de Juiz de Fora
  • Wilson Toshiro Nakamura Universidade Presbiteriana Mackenzie

Keywords:

Pecking Order. Trade-off. Capital Structure. Emerging countries. Economic Crisis.

Abstract

Purpose: Verify the effects of the subprime mortgage crisis on firms with different debt levels.

Originality/Gap/Relevance/Implications: The study contributes to the literature by examining the financial capital structure of emerging market companies in a context of crisis, in addition to using a robust econometric tool - the quantile regression.

Key methodological aspects: In this work the quantile regression was used as analysis tool, this technique allowed to observe the impacts of the crisis not only in the average level of indebtedness of companies, but also in its extreme values. Therefore, this work is characterized as descriptive, and analyzed relations are quantitative. Firms were analyzed in Brazil, Russia, India, China.

Summary of key results: The results indicate financing strategies, according to the theories of Pecking Order and Trade-off according to the level of debt.

Key considerations/conclusions: The survey concluded that firms have different financing strategies, in the same country. Thus, the financial performance of firms would be influenced by economic conditions in the country, as well as the existing debt level in each company.

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Author Biographies

Edilson dos Santos Silva, Centro Universitário Tiradentes

Doutor em Administração pela Universidade Federal de Pernambuco.

 

Josete Florencio dos Santos, Universidade Federal de Pernambuco

Doutora em Administração pela Universidade Federal do Rio de Janeiro.

Fernanda Finotti Cordeiro Perobelli, Universidade Federal de Juiz de Fora

Doutora em Administração pela Universidade de São Paulo

Wilson Toshiro Nakamura, Universidade Presbiteriana Mackenzie

Doutor em Administração pela Universidade de São Paulo

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Published

2016-06-23

Issue

Vol. 17 No. 3 (2016)

Section

Strategic Finances

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