The Effects of Diversification Strategies on Capital Structure: An Empirical Study on European Companies - Couverture souple

Apostu, Andreea

 
9783844322286: The Effects of Diversification Strategies on Capital Structure: An Empirical Study on European Companies
Couverture souple
ISBN 10 : 3844322280 ISBN 13 : 9783844322286
Editeur : LAP LAMBERT Academic Publishing, 2011

Synopsis

The role of diversification strategies in financial choices has received little attention in previous empirical financial studies. The aim of this paper is to study the effect of corporate diversification strategies on firm capital structure using a panel data analysis for a sample of 232 European firms during the period 2004-2007. Theoretical and empirical studies suggest that corporate leverage is positively related to diversification across product lines but negatively related to geographic diversification. Some studies show that these diversification strategies are complementary in generating debt usage. This paper estimates two alternative models employed by previous empirical work in the study of capital structure determinants: static trade-off model and a dynamic target adjustment model. After controlling for firm size, profitability, growth, assets tangibility and operating risk, the study finds that product and geographical diversification do not have a significant influence on leverage.

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Présentation de l'éditeur

The role of diversification strategies in financial choices has received little attention in previous empirical financial studies. The aim of this paper is to study the effect of corporate diversification strategies on firm capital structure using a panel data analysis for a sample of 232 European firms during the period 2004-2007. Theoretical and empirical studies suggest that corporate leverage is positively related to diversification across product lines but negatively related to geographic diversification. Some studies show that these diversification strategies are complementary in generating debt usage. This paper estimates two alternative models employed by previous empirical work in the study of capital structure determinants: static trade-off model and a dynamic target adjustment model. After controlling for firm size, profitability, growth, assets tangibility and operating risk, the study finds that product and geographical diversification do not have a significant influence on leverage.

Biographie de l'auteur

BSc. in Finance and Banking from the Academy of Economic Studies in Bucharest and MSc. in Finance and International Business from Aarhus School of Business.

Les informations fournies dans la section « A propos du livre » peuvent faire référence à une autre édition de ce titre.

Éditeur
LAP LAMBERT Academic Publishing
Date d'édition
2011
Langue
anglais
ISBN 10 
3844322280
ISBN 13 
9783844322286
Reliure
Broché
Nombre de pages
80
Coordonnées du fabricant
non disponible
Personne responsable
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