An Empirical Study on Determinants of Corporate Capital Structure:Evidence from UK

Dong, Handi (2011) An Empirical Study on Determinants of Corporate Capital Structure:Evidence from UK. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

This paper examines the determinants of capital structure of FTSE 100 constituents UK listed

companies over period from 2001 to 2010 using panel data. Several capital structure theories are

reviewed in order to propose the testable hypotheses regarding the firms’ capital structure decisions in

UK. To test these hypotheses, both pooled ordinary least square and fixed effects model are utilized.

The result of the study shows that tangibility and firm size are positively relationship with all three

gearing ratio which are short-term debt, long-term debt and total debt, while profitability and liquidity

are inversely related to leverage. Growth opportunity is negatively relationship with short-term

leverage, but positively relationship with long-term and total debt. Overall, the outcome of the

research suggests that tangibility and liquidity are significant level of leverage, while profitability and

firm size are significant level of long-term gearing ratio and total gearing ratio. Therefore, these

independent variables have significant influence on capital structure.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 25 Apr 2012 14:46
Last Modified: 24 Oct 2016 04:36
URI: http://eprints.nottingham.ac.uk/id/eprint/25097

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