Capital Structure Changes in Korea from 1981 to 2005: Evidence and Implications
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The question of how debt ratios in Korean companies have changed over the last 25 years was investigated, along with the additional issue of a possible nonlinear relationship between debt ratio and explanatory variables. Using the well-known model introduced by Rajan and Zingales (1995), I examined first the applicability of the preceding model to Korean firms' data and then, the existence of the nonlinearity, depending on both firms' debt ratio and the levels of explanatory variables. Test results confirmed the influential role of government policy and the need for considering nonlinearity in future research.
Abstract
The question of how debt ratios in Korean companies have changed over the last 25 years was investigated, along with the additional issue of a possible nonlinear relationship between debt ratio and explanatory variables. Using the well-known model introduced by Rajan and Zingales (1995), I examined first the applicability of the preceding model to Korean firms' data and then, the existence of the nonlinearity, depending on both firms' debt ratio and the levels of explanatory variables. Test results confirmed the influential role of government policy and the need for considering nonlinearity in future research.
참고문헌 (20)
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