Capital structure, stock exchanges in Chile: 2007 to 2016
Keywords:
Trade-off theory, Pecking order theory, Debt, Determinants of the capital structure, Analysis of multiple linear regressionAbstract
Purpose. The article consists of analyzing the behavior of the determinants of the capital structure of Chilean companies between 2007 and 2016. The objective of this study was achieved through a typology of research based on bibliographic, documentary, exploratory and explanatory, considering annual financial reports from Economática in the chosen period.
Design/methodology/approach. As this is a research study with a quantitative approach, the statistical tools used were descriptive analysis, Pearson correlation, variance inflation factor (VIF) and panel regression.
Findings. The results show that Chilean companies (240) have higher and costly long-term debt. These companies have high averages in current liquidity, return to shareholders, growth in sales and assets and market-to-book (MTB). Long-term debt was highlighted with an explanatory power of 85%. Current liquidity was highlighted as being significant in most of the indebtedness proposed in the survey, failing to register brands like this in expensive short-term and long-term indebtedness. It is noticed that flip flops companies are more prone to the pecking order theory (POT). The gap occupied by this study is linked to research involving South American countries, especially the Chilean market, and the determinants of the capital structure.
Originality/value. As future research, it is suggested to include other types of variables related to indebtedness and the same action for its determinants, in addition to the speed technique of adjusting corporate debts.
Downloads
References
Allen, N.B. and Gregory, F.U. (1995), “Relationship lending and lines of credit in small firm finance”, The Journal of Business, Vol. 68 No. 3, pp. 351-381, Recuperado de: https://www.jstor.org/stable/2353332?seq=1.
Balakrishnan, S. and Fox, I. (1993), “Strategic management journal”, Wiley Blackwell, Vol. 14 No. 1, pp. 3-16.
Bastos, D.D., Nakamura, W.T. and Basso, L.F. (2009), “Determinantes da estrutura de capital das companhias abertas na América Latina: um estudo empírico considerando fatores macroeconômicos e institucionais”, Revista de Administração Mackenzie, Vol. 6, pp. 47-77, available at: http://editorarevistas.mackenzie.br/index.php/RAM/article/view/1437/1325.
Booth, L., Aivazian, V., Demirguc Kunt, A. and Maksimovic, V. (2001), “Capital structures in developing countries”, The Journal of Finance, Vol. 56 No. 1, pp. 87-130.
Bradley, M., Jarrell, G.A. and Kim, E.H. (1984), “On the existence of an optimal capital structure: theory and evidence”, Journal of Finance, Vol. 39 No. 3, pp. 857-78, Recuperado de: https://econpapers.repec.org/article/blajfinan/v_3a39_3ay_3a1984_3ai_3a3_3ap_3a857-78.htm.
Brito, G., Corrar, J. and Bastitella, F. (2007), “Fatores determinantes da estrutura de capital das maiores empresas que atuam no Brasil”, Revista Contabilidade and Finanças – USP, Vol. 43, pp. 9-19, available at: http://www.scielo.br/scielo.php?script=sci_arttext&pid=S1519-70772007000100002&lng=pt&tlng=pt.
Brooks, C. (2008), Introductory Econometrics for Finance, Cambridge University Press, Cambridge.
Correa, C.A., Basso, L.F.C. and Nakamura, W.T. (2013), “A estrutura de capital das maiores empresas brasileiras: análise empírica das teorias de pecking order e trade-off, usando panel data”, RAM, Revista de Administração Mackenzie, Vol. 14 No. 4, pp. 106-133, doi: 10.1590/S1678-69712013000400005.
Damodaran, A. (2007), Avaliação de empresas, Pearson, São Paulo.
DeAngelo, H. and Masulis, R. (1980), “Optimal capital structure under corporate taxation”, Journal of Financial Economics, Vol. 8, pp. 5-29.
Delcoure, N. (2007), “The determinants of capital structure in transitional economies”, International Review of Economics and Finance, Vol. 16 No. 3, pp. 400-415, doi: 10.1016/j.iref.2005.03.005.
Durand, D. (1952), “Cost of debt and equity funds for business: trends and problems in measurement”, Conference on Research in Business Finance (1952). Proceedings…, National Bureau of Economic Research, New York, pp. 215-262.
Durand, D. (1959), “The cost of capital, corporate finance, and the theory of investment: comment”, The American Economic Review, Vol. 4, pp. 639-655.
Espinosa, C., Maqueira, C., Vieto, J.P. and González (2012), “Capital structures um developing countries: tha Latin American case”, Investigación Económica, Vol. 71, pp. 35-54.
Fama, E. and French, K. (2002), “Testing trade-off and pecking order predictions about dividends and debt”, The Review of Financial Studies, Vol. 15 No. 1, pp. 1-33, available at: http://www.jstor.org/stable/2696797.
Ferri, M.G. and Jones, W.H. (1979), “Determinants of financial structure: a nem methodological approach”, Journal of Finance, Vol. 34, pp. 631-644.
Fiirst, C., Cunha, L.C. and Silva, T.P. (2017), “Estrutura de capital na perspectiva da teoria Pecking Order e Assimetria da Informação nas empresas brasileiras, chilenas e mexicanas no período de 1999 a 2013”, Cuadernos de Contabilidad, No. 18, pp. 1-12.
Frank, M.Z. and Goyal, V.K. (2003), “Testing the pecking order theory of capital structure”, Journal of Financial Economics, Vol. 67 No. 2, pp. 217-248.
Gaud, P., Jani, E., Hoesli, M. and Bender, A. (2005), “The capital structure of Swiss companies: an empirical analysis using dynamic panel data”, European Financial Management, Vol. 11 No. 1, pp. 51-59, doi: 10.1111/j.1354-7798.2005.00275.x.
Gomes, G.L. and Leal, R.P.C. (2001), “Determinantes da Estrutura de Capitais das Empresas Brasileiras com Ações Negociadas em Bolsas de Valores”, Finanças Corporativas, Atlas, São Paulo.
Harris, M. and Raviv, A. (1991), “The theory of optimal capital structure”, Journal of Finance, Vol. 48, pp. 297-356.
Johnson, R.A. and Wichern, D.W. (1998), Applied Multivariate Statistical Analysis, Prentice-Hall, New York.
Kayo, E.K. and Famá, R. (1997), “Teoria de agencia e crescimento: evidencias empíricas dos efeitos positivos e negativos do endividamento”, Caderno de Pesquisa em Administração, Vol. 2 No. 5, pp. 1-8.
Kochhar, R. (1997), “Strategic assets, capital structure, and firm performance”, Journal of Financial and Strategic Decisions., Vol. 10 No. 3, pp. 23-36, available at: http://www.financialdecisionsonline.org/archive/pdffiles/v10n3/kochhar.pdf.
Kraus, A. and Litzenberger, R.H. (1973), “A estare preference model of optmial finacial leverage”, The Journal of Finance, Vol. 38 No. 4, pp. 911-922.
Lemmon, M.L., Roberts, M.R. and Zender, J.F. (2008), “Back to the beginning: persistence and the cross-section of corporate capital structure”, The Journal of Finance, Vol. 63 No. 4, pp. 1575-1608, available at: http://www.uh.edu/∼bsorense/LemmonRobertsZender.pdf.
Lumby, S. (1991), Investment Appraisal and Financing Decisions, 3rd ed., Van Nostrand Reinhold.
Miller, M.H. (1977), “Debt and taxes”, The Journal of Finance, Vol. 32, pp. 261-275, doi: 10.1111/j.1540-6261.1977.tb03267.x.
Modigliani, F. and Miller, M. (1958), “The cost of capital, corportation finance and the theory of investment”, The American Economic Review, Vol. 48 No. 3, pp. 261-297.
Modigliani, F. and Miller, M. (1961), “Dividend politicy, growth and the valuation of shares”, Journal of Business, Vol. 34, p. 411.
Modigliani, F. and Miller, M.H. (1963), “Corporate income taxes and the cost of capital a correction”, American Economic Review, Vol. 53, pp. 433-443.
Myers, S. (1984), “The capital structure puzzle”, The Journal of Finance, Vol. 39 No. 3, pp. 575-592.
Myers, S.C. (2001), “Capital structure”, The Journal of Economic Perspectives, Vol. 15 No. 2, pp. 81-102.
Myers, S.C. and Majluf, N. (1984), “Corporate financing and investment decisions when firms have information that investors do not have”, Journal of Financial Economics, Vol. 13 No. 2, pp. 187-221.
Myers, S.C. and Rajan, R.G. (1998), “The paradox of liquidity”, The Quarterly Journal of Economics, Vol. 113 No. 3, pp. 733-771, available at: http://www.utdallas.edu/∼nina.baranchuk/Fin7310/papers/MyersRajan1998.pdf.
Nakamura, W.T., Martin, D.M.L., Forte, D., Filho, A.F.C., Costa, A.C.F. and Amaral, A.C. (2007), “Determinantes de estrutura de capital no mercado brasileiro: análise de regressão com painel de dados no período 1999-2003”, Revista Contabilidade and Finanças, Vol. 18 No. 44, pp. 72-85, doi: 10.1590/S1519-70772007000200007.
Nunkoo, P.K. and Boateng, A. (2010), “The empirical determinants of target capital structure and adjustment to long-run target: evidence from Canadian firms”, Applied Economics Letters, Vol. 17 No. 10, pp. 983-990.
Ozkan, A. (2001), “Determinants of capital structure and adjustment to long run target: evidence from UK company panel data”, Journal of Business Finance and Accounting, Vol. 28, pp. 175-198, doi: 10.1111/1468-5957.00370.
Perobelli, F.F.C. and Famá, R. (2003), “Fatores determinantes da estrutura de capital para empresas latino-americanas”, Revista De Administração Contemporânea, Vol. 7 No. 1, pp. 226-230, available at: http://www.scielo.br/pdf/rac/v7n1/v7n1a02.
Póvoa, A.C.S. and Nakamura, W.T. (2015), “Relevância da estrutura de dívida para os determinantes da estrutura de capital: um estudo com dados em painel”, Revista Contemporânea de Contabilidade, Vol. 12 No. 25, pp. 3-25, available at: https://www.redalyc.org/pdf/762/76238832001.pdf.
Rajan, R. and Zingales, L. (1995), “What do we know about capital structure? Some evidence from international data”, Journal of Finance, No. 50, pp. 1421-1460.
Remmers, L., Stonehill, A., Wright, R and Beekhuisen, T. (1974), “Industry and size as debt ratio determinants in manufacturing internationally”, Financial Management, pp. 24-32, Recuperado de: https://www.jstor.org/stable/3665286?seq=1.
Rodrigues, S.V. and Santos, D.F.L. (2018), “A gestão da estrutura de capital dos países andinos pós-crise de 2008”, Revista de Administração da UNIMEP, Vol. 16, pp. 133-155.
Rodrigues, S.V., Moura, H.J., Santos, D.F.L. and Sobreiro, V.A. (2017), “Capital structure management diferences in Latin American and US firms after 2008 crisis”, Journal of Economics, Finance and Administrative Science, Vol. 22, pp. 51-74.
Sandberg, C.M., Lewellen, W.G. and Stakey, K.L. (1987), “Financial strategy: planning and managing the corporate leverage position”, Strategic Management Journal, Vol. 8 No. 1, pp. 15-24.
Scott, D.F. Jr. and Martin, J.D. (1975), “Industry influence on financial structure”, Financial Management, Vol. 4, pp. 67-73.
Stiglitz, J.E. (1969), “A Re-examination of the Modigliani-Miller theorem”, American Economic Review, Vol. 59 No. 5, pp. 784-793.
Stonehill, A., Beekhuisen, T., Wright, R. and Remmers, L. (1975), “Financial goals and debt ratio determinants: a survey of practice in five countries”, Financial Management, pp. 27-33, Recuperado de: https://www.jstor.org/stable/3665187.
Tapia, G. and Albornoz, C. (2017), Tratado de finanzas, negocios, empresas y organizaciones, Thomson Reuters, Buenos Aires.
Thies, C.F. and Klock, M.S. (1992), “Determinants of capital structure”, Review of Financial Economics, Recuperado de: https://onlinelibrary.wiley.com/doi/abs/10.1002/j.1873-5924.1992.tb00548.x.
Titman, S. and Wessels, R. (1988), “The determinants of capital structure choice”, Journal of Finance, Vol. 48 No. 3.
Toy, N., Stonehill, A., Remmers, L. and Wright, R. (1974), “A comparative international study of growth, profitability and risk as determinants of corporate debt ratios in the manufacturing sector”, Journal of Finance and Quantitative Analysis, pp. 875-886, Recuperado de: https://www.jstor.org/stable/2329684.
Williams, J.B. (1938), The Theory of Investment Value, Harvard University Press, Cambridge, MA.
Wooldridge, J.M. (2010), Econometric Analysis of Cross Section and Panel Data, MIT Press, London.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Journal of Economics, Finance and Administrative Science
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
