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A Comparison of Capital Structure Determinants: The United States and The Republic of Korea

Hanjoon Kim (Full‐time lecturer in the Department of Business Administration, College of Economics and Business Administration, Cheongju University, Republic of Korea)
Paul D. Berger (Professor in the Departments of Mathematical Sciences and Marketing at Bentley College in Waltham, Massachusetts)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 11 March 2008

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Abstract

This paper investigates the determinants of the capital structure of large corporations headquartered in the United States and Korea. We consider five explanatory variables: profit, company size, non‐debt tax shields, growth, and business‐risk, along with several industry indicator variables as independent variables and examine, for each country, the relationship to market value based leverage ratio. With our rigid criteria for inclusion in the study, we study the top thirteen companies (by size) in each of seven industries. The majority of our findings indicate that we can generalize to Korea what has been found for Japanese companies/industries relative to the U.S.

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Citation

Kim, H. and Berger, P.D. (2008), "A Comparison of Capital Structure Determinants: The United States and The Republic of Korea", Multinational Business Review, Vol. 16 No. 1, pp. 79-100. https://doi.org/10.1108/1525383X200800004

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited