We evaluate the effect of country-level uncertainty avoidance on capital structure decisions. Our analysis reveals that uncertainty avoidance has a negative effect on long-term debt that is essentially offset by a positive effect on short-term debt, therefore resulting in a negligeable effect on...

We hypothesize that Hofstede’s uncertainty avoidance index has a moderating effect on the firm-level determinants of capital structure. Using a large panel of listed firms around the world, we show that uncertainty avoidance amplifies the positive impact of firm size and asset tangibility and...