To read the full version of this content please select one of the options below:

Application of capital structure theories: a systematic review

Yukti Bajaj (Department of Management Studies, Indian Institute of Technology Delhi, New Delhi, India)
Smita Kashiramka (Department of Management Studies, Indian Institute of Technology Delhi, New Delhi, India)
Shveta Singh (Department of Management Studies, Indian Institute of Technology Delhi, New Delhi, India)

Journal of Advances in Management Research

ISSN: 0972-7981

Article publication date: 28 August 2020

Issue publication date: 27 April 2021

1387

Abstract

Purpose

The present study aims to analyse the literature on capital structure theories for the last 21 years to identify the existing gaps and themes for prospective researchers in this domain.

Design/methodology/approach

A sample of 183 articles published from 1999 to 2019 in the Scopus database using “capital structure theory” and “leverage” as keywords was analysed on various basis. A citation analysis was also performed to recognize impactful authors and papers.

Findings

The findings revealed that though the capital structure research studies were highly focussed on developed economies, with time, research studies in developing markets are increasing. Further, the capital structure research studies were largely conducted by considering all the industries together, whereas the focus on a particular industrial sector was meagre. Almost all the studies were empirical, thus providing scope for primary research. Various forms of regression were popular econometric techniques used in this area of late. This review highlighted the dominance of trade-off theory to elucidate the capital structure of firms, irrespective of the status of the economy. The comprehensive review uncovered the existing gaps and identified major themes evolving in the capital structure domain.

Originality/value

Unlike a traditional review paper, this study classifies sample articles based on several parameters and depicts a graphical presentation of the findings to cover research gaps, avenues, evolving themes, key aspects, impactful authors and their papers, etc. in the capital structure domain. It provides ready-made information available for prospective research studies in this field.

Keywords

Acknowledgements

The authors extend their sincere thanks to the editors for providing them the opportunity to publish in Journal of Advances in Management Research (a journal of international repute). They would also like to extend their regards to the anonymous reviewers for the rigorous review, helpful comments and constructive suggestions. The feedback has surely contributed to the enhancement of the original piece of work. However, all of the remaining errors and omissions are of authors.

Citation

Bajaj, Y., Kashiramka, S. and Singh, S. (2021), "Application of capital structure theories: a systematic review", Journal of Advances in Management Research, Vol. 18 No. 2, pp. 173-199. https://doi.org/10.1108/JAMR-01-2020-0017

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

Related articles