This paper uses dynamic panel estimators to test whether there are differences in the speed of capital structure adjustment between US-based multinationals and domestic corporations, and why such differences may occur. Prior literature attributes the differences in leverage between MNCs and DCs...

I translate familiar concepts of discrete-time time series to contnuoustime equivalent. I cover lag operators, ARMA models, the relation between levels and differences, integration and cointegration, and the Hansen–Sargent prediction formulas.

Using a large sample of 5,365 European firms,we document the driving factors of debt-equity choices. Adjustments to a target debt level play a modest role except when debt exceeds an upper barrier, a result that underlines the importance of debt capacity. Preference for internal financing,...

This research analyzes the determinants of capital structure across 37 countries. Institutional arrangements matter for capital structure decisions; however, firm-level covariates drive two-thirds of the variation in capital structure across countries, while the country-level covariates explain...

We incorporate long-term defaultable corporate bonds and credit risk in a dynamic stochastic general equilibrium business cycle model. Credit risk ampli¯es aggregate tech- nology shocks. The debt-capital ratio is a new state variable and its endogenous movements provide a propagation mechanism....

This paper introduces a new approach of testing capital structure hypothesis on a firm specific level. Johansen's procedure for cointegration testing is employed to test theories of optimal capital structure. The sample covers a firm with unique properties, Hufvudstaden, during the period 1938...