Dynamics of Firms’ Capital Structures in the South and East Asian Countries

Posted: 16 Feb 2010

See all articles by Rashid Ameer

Rashid Ameer

IPU New Zealand Tertairy Institute

Date Written: February 15, 2010

Abstract

This paper examines the dynamics of firms’ capital structure in the South and East Asian countries. From an empirical perspective, we used dynamic partial model that enabled us to discriminate between the various factors that impact on target debt ratio and those that impact on the speed of adjustment of the firms’ debt ratios respectively. Our retrospective analysis of the sequencing strategies of banking sector and stock market liberalization indicate that endogenous adjustment speed of firms’ debt ratios vary across firms and countries. The shorter lags or less spacing in between implementation of major liberalization policies have been associated with faster capital structure adjustment in some countries. We propose that these findings have important implications for the design and implementation of the financial reforms to predict the capital structure adjustment processes of the firms.

Suggested Citation

Ameer, Rashid, Dynamics of Firms’ Capital Structures in the South and East Asian Countries (February 15, 2010). Available at SSRN: https://ssrn.com/abstract=1553110

Rashid Ameer (Contact Author)

IPU New Zealand Tertairy Institute ( email )

57 Aokautere Drive
Fitzherbert
Palmerston north
New Zealand

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