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...

Many authors relate a firm's performance to legal and political features and the regulatory environment in which it operates. This article compares firms' capital structure adjustments across countries and investigates whether institutional differences help explain the variance in estimated...

Bond credit spreads reflect the issuer's expected default probability. In an efficient market, spreads will reflect both the issuer's current risk and investors' expectations about how that risk might change in the future. Collin-Dufresne and Goldstein (2001) show analytically that a firm's...

U.S. banks hold significantly more equity capital than required by their regulators. We test competing hypotheses regarding the reasons for this ldquo;excessrdquo; capital, using an innovative partial adjustment approach that allows estimated BHC-specific capital targets and adjustment speeds to...

We examine the dynamic behavior of bank capital using a global sample of 64 countries during the 1994–2010 period. Banks achieve deleveraging primarily through equity growth (rather than asset liquidation). In contrast, they achieve leveraging through reduced earnings retention and substantial...