Which Factors Determine the Capital Structure of Non-Financial Publicly Traded Irish Firms?

In this paper, we trace the indebtedness of the non-financial corporate sector in Ireland over the period from 1980 to 2007. This period witnessed an episode of leveraging to 2001, following by a period of deleveraging to 2007. Our findings suggest that fundamentals can help explain why firms became more indebted between 1980 and 2001, but the deleveraging that took place after 2001 is due to factors other than the fundamentals included in our analysis. While we cannot say definitively, our findings may be in line with evidence which points to a concerted effort on the part of Irish firms to reduce their debt financing since 2001