Partial adjustment toward target capital structures

• 成果类型: Article
• 署名作者: Flannery, MJ; Rangan, KP
• 署名单位: State University System of Florida; University of Florida; University System of Ohio; Case Western Reserve University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2005.03.004
• 发表日期: 2006
• 页码: 469-506
• 关键词: Leverage; Tradeoff theory; target; Speed of adjustment

摘要

The empirical literature provides conflicting assessments about how firms choose their capital structures. Distinguishing among the three main hypotheses (tradeoff, pecking order, and market timing) requires that we know whether firms have long-run leverage targets and (if so) how quickly they adjust toward them. Yet many previous researchers have applied empirical specifications that fail to recognize the potential for incomplete adjustment. A more general, partial-adjustment model of firm leverage indicates that firms do have target capital structures. The typical firm closes about one-third of the gap between its actual and its target debt ratios each year. (c) 2005 Elsevier B.V. All rights reserved.