CEO option compensation and the capital structure decision are simultaneously made choices. Using the Internal Revenue Code 162(m) tax law as an exogenous shock to compensation structure in a natural experiment setting, I can identify firm leverage changes as a result of CEO option compensation...

The financing method of Chinese listed firms has been studied for a long time, but with inconclusive indications. This paper thus adopts Chinese listed firms' data from 2003 to 2015 to investigate the pecking order theory by testing the relationship between financing deficit and long-term debt...

We study the relationship between corporate leverage and the sensitivity of industrial production to monetary policy shocks within the euro-area manufacturing sector. Using polynomial state-dependent local projections, we document a non-linear association. When leverage is low, more indebted...

This study examines the influence of labour market conditions on corporate capital structure in a sample of 2,892 firms from France, Germany, Italy, Spain, and the UK. After considering the effect of unemployment and inflation, we analyse the impact of two market imperfections: employees’...

Using a large sample of U.S. firms over the period, 1984 to 2013, this study examines the relation between market and book leverage ratios. Unlike Welch (2004) who contends that changes in market leverage do not induce adjustments in book leverage, we find an asymmetric effect. That is, firms...

This paper reviews the literature on a firm's capital structure that is driven by asymmetric information. One of the most popular models of firm's financing decisions under an asymmetry in the literature is the pecking order theory (POT) of Myers (1984). It is based on the argument that firms...

This paper investigates on what drives the different determinants of systemic risk contribution in different countries, based on a dataset for commercial banks in a bank-based system (the BRICs and Japan) and a market-based system (the US). In both separate and pooled systems, the determinants...

We examine the capital structure dynamics of Central and Eastern European firms to get a better understanding of the quantitative and qualitative development of the financial systems in this region. The dynamic model used endogenizes the target leverage as well as the adjustment speed. It is...