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Title: Capital structure decisions : which factors are reliably important?
Authors: Goyal, Vidhan K.
Frank, Murray Z.
Keywords: Capital structure
Pecking order
Tradeoff theory
Market timing
Multiple imputation
Issue Date: 2009
Citation: Financial Management , v. 38, iss. 1, p. 1-37
Abstract: This paper examines the relative importance of many factors in the everage decisions of publicly traded American firms from 1950 to 2003. The most reliable factors are median industry leverage (+ effect on leverage), market-to-book ratio (-), tangibility (+), profits (-), log of assets (+), and expected inflation (+). Industry subsumes a number of smaller effects. The empirical evidence seems reasonably consistent with some versions of the tradeoff theory of capital structure.
Rights: This is a preprint article published in Financial Management © copyright 2009 Wiley-Blackwell. The original journal article is posted on the journal's web site at
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