Determinants of capital structure in UK and Chinese consumer service industry

FENG, CHUN (2013) Determinants of capital structure in UK and Chinese consumer service industry. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

This paper aims to investigate the determinants of capital structure in Chinese and UK consumer service industry. This research use panel data to investigate 1618 observations of the Chinese companies and 835 observations of the UK companies in consumer service industry from 2003 to 2012. This test is run on total, long-term and short-term leverage as dependent variables. Profitability, size, growth opportunity, volatility, non-debt tax shields, collateral value of assets, uniqueness is determined as independent variables.

Depends on our empirical research, most of determinants follow the prediction of trade-off and pecking order theory. Growth opportunities and collateral value of assets are proved have significant influence on leverage level in Chinese companies. In addition, Growth opportunities, uniqueness, profitability, size and collateral value of assets are proved have significant influence on leverage level in UK companies. On the contrary, volatility and non-debt tax shields do not have any explanation power for Chinese and UK companies’ financing choices. In addition, uniqueness, profitability and size are also insignificant relationship on leverage level. Obviously, there are different influences of the leverage in Chinese and UK consumer service industry.

Key words: Capital structure, trade-off theory, pecking order theory, agency cost theory.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 04 Mar 2014 14:34
Last Modified: 25 Oct 2016 09:54
URI: http://eprints.nottingham.ac.uk/id/eprint/26832

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