Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure?

Danso, Albert, Fosu, Samuel, Owusu-Agyei, Samuel, Ntim, Collins G., and Adegbite, Emmanuel (2021) Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure? International Journal of Finance & Economics, 26 (4). pp. 5073-5092.

PDF (Publisher Accepted Version) - Accepted Version
Available under License Creative Commons Attribution Non-commercial No Derivatives.

Download (1MB) | Preview
View at Publisher Website:


We investigate firm-level determinants of capital structure using a large sample of 4,284 Japanese firms over a 19-year period (i.e., over 61,000 firm-year observations), a hitherto less examined sample for this purpose. We conduct our analysis and interpret our findings predominantly within the pecking order, the trade-off and the agency theoretical frameworks. We uncover three new findings. First, our evidence indicates that insights derived from the extant literature on capital structure are cross-national and are applicable in the context of Japan, despite the unique characteristics of Japanese firms. Second, financial crisis significantly impacts the relationship between leverage and firm-level determinants, particularly accentuating the effect of asset tangibility and growth. Third, product market competition significantly impacts the observed relationship between firm-level determinants and leverage. Our results are robust, controlling for the joint effects of competition and crisis.

Item ID: 63905
Item Type: Article (Research - C1)
ISSN: 1099-1158
Keywords: agency theory, capital structure, competition, financial crisis, Keiretsu, Japan
Copyright Information: This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. © 2020 The Authors. International Journal of Finance & Economics published by John Wiley & Sons Ltd.
Date Deposited: 29 Jul 2020 07:44
FoR Codes: 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350202 Finance @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910103 Economic Growth @ 100%
Downloads: Total: 706
Last 12 Months: 110
More Statistics

Actions (Repository Staff Only)

Item Control Page Item Control Page