Determinants of Leverage in Emerging Markets: Empirical Evidence
The purpose of this paper is to investigate the relationship between leverage and its main determinants in the Argentine context, using the trade-off theory and the pecking order theory. Studies that have addressed this issue in emerging economies are still quite rare and the results are incomplete...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
EconJournals
2021-03-01
|
| Series: | International Journal of Economics and Financial Issues |
| Online Access: | http://mail.econjournals.com/index.php/ijefi/article/view/10997 |
| _version_ | 1797908490069475328 |
|---|---|
| author | Yarong Chen Luca Sensini Maria Vazquez |
| author_facet | Yarong Chen Luca Sensini Maria Vazquez |
| author_sort | Yarong Chen |
| collection | DOAJ |
| description |
The purpose of this paper is to investigate the relationship between leverage and its main determinants in the Argentine context, using the trade-off theory and the pecking order theory. Studies that have addressed this issue in emerging economies are still quite rare and the results are incomplete and controversial. To identify the companies to be analyzed, we used a stratified sampling methodology, following an economic criterion. The balance sheet data were collected through a questionnaire and were normalized to neutralize the effects of high inflation. The period analyzed is 3 years and concerns 181 companies. The research hypotheses were tested using a static fixed effects (FE) model. The results of this paper contribute to the existing literature, providing further empirical evidence on the financial behaviour of firms in an as yet unexplored economic context. Furthermore, empirical findings can be useful for Argentine entrepreneurs and managers of companies to improve their financial decisions.
Keywords: Capital structure, Leverage, Profitability, Business Risk, Emerging Markets
JEL Classifications: G32, M16, M21
DOI: https://doi.org/10.32479/ijefi.10997
|
| first_indexed | 2024-04-10T10:53:31Z |
| format | Article |
| id | doaj.art-b65a1b69c27c4f11a229a249c8378c8a |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T10:53:31Z |
| publishDate | 2021-03-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-b65a1b69c27c4f11a229a249c8378c8a2023-02-15T16:20:03ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382021-03-01112Determinants of Leverage in Emerging Markets: Empirical EvidenceYarong Chen0Luca Sensini1Maria Vazquez2SoB, Department of Economics and Management, Hubei - ChinaDepartment of Management and Innovation Systems University of SalernoBusiness Economics Laboratory, Buenos Aires, Argentina The purpose of this paper is to investigate the relationship between leverage and its main determinants in the Argentine context, using the trade-off theory and the pecking order theory. Studies that have addressed this issue in emerging economies are still quite rare and the results are incomplete and controversial. To identify the companies to be analyzed, we used a stratified sampling methodology, following an economic criterion. The balance sheet data were collected through a questionnaire and were normalized to neutralize the effects of high inflation. The period analyzed is 3 years and concerns 181 companies. The research hypotheses were tested using a static fixed effects (FE) model. The results of this paper contribute to the existing literature, providing further empirical evidence on the financial behaviour of firms in an as yet unexplored economic context. Furthermore, empirical findings can be useful for Argentine entrepreneurs and managers of companies to improve their financial decisions. Keywords: Capital structure, Leverage, Profitability, Business Risk, Emerging Markets JEL Classifications: G32, M16, M21 DOI: https://doi.org/10.32479/ijefi.10997 http://mail.econjournals.com/index.php/ijefi/article/view/10997 |
| spellingShingle | Yarong Chen Luca Sensini Maria Vazquez Determinants of Leverage in Emerging Markets: Empirical Evidence International Journal of Economics and Financial Issues |
| title | Determinants of Leverage in Emerging Markets: Empirical Evidence |
| title_full | Determinants of Leverage in Emerging Markets: Empirical Evidence |
| title_fullStr | Determinants of Leverage in Emerging Markets: Empirical Evidence |
| title_full_unstemmed | Determinants of Leverage in Emerging Markets: Empirical Evidence |
| title_short | Determinants of Leverage in Emerging Markets: Empirical Evidence |
| title_sort | determinants of leverage in emerging markets empirical evidence |
| url | http://mail.econjournals.com/index.php/ijefi/article/view/10997 |
| work_keys_str_mv | AT yarongchen determinantsofleverageinemergingmarketsempiricalevidence AT lucasensini determinantsofleverageinemergingmarketsempiricalevidence AT mariavazquez determinantsofleverageinemergingmarketsempiricalevidence |