DETERMINANTS OF CAPITAL STRUCTURE IN LATIN AMERICA: THE ROLE OF FIRM-SPECIFIC AND MACROECONOMIC FACTORS

摘要

Recent empirical evidence suggests that country-specific factors are major determinants of capital structure in emerging markets [2] 2]. These country-specific factors include institutional . Framework, legal and accounting practices, financial development, and the macroeconomic environment. This paper investigates the determinants of capital structure using panel data techniques for a sample of over 700 firms from the seven biggest Latin American economies in the period 1986-2000 to determine the relative importance of firm-specific, country-specific and macroeconomic factors in the corporate leverage decision. Contrary to previous studies, our evidence indicates that the explanatory power of country-specific factors, whether institutional or macroeconomic, is outweighed by the much more important firm-specific factors. Also, some support is found in favor of Myers’ [12] Pecking Order Hypothesis.