Capital structures of listed firms in ASEAN

Abstract

The objective of this dissertation is to study the firm-, industry-, and countrylevel factors influencing the capital structures of the listed firms in ASEAN. The 3,750 samples are collected annually for 12 years from 2000 to 2011, resulting in 45,000 firm-year observations. The pooled ordinary least squared regression is used in the analysis for all combined three-level features. The leverage measures cover various proxies of capital structures. The evidence shows that firm size and tangibility are significantly and positively related to leverage, while profitability, growth opportunity, non-debt tax shield, liquidity, and interest rate are significantly and negatively related to leverage, consistent with theories and prior studies. However, business risk is insignificantly related to leverage. Munificence as an industry-specific factor is significantly and negatively related to market-based leverage ratios, while dynamism of an industry is significantly and negatively related to long-term debt book leverage. However, the Herfindahl-Hirschman index is significantly and negatively related to seven of eight leverage ratios, consistent with prior study. All five country-specific factors are significantly related to total debt book leverage and long-term liabilities market leverage. Only inflation rate as a country-specific attribute is significantly and positively related to all leverage ratios. Moreover, there are differences in the leverage across industries and countries. Overall, the impact of firm-specific factors on leverage ratios plays important role.