A comparative analysis of capital structure of G-20 firms on regional basis

Abstract

Purpose

The purpose of this study is to illuminate financial commitment of a firm vis-a-vis corporate behavior of 519 reported fabric businesses in G-20 states. This study also aims to take into account the regional baseline comparisons (i.e. subsampling) of G-20 firms based on the available data. The pattern of the current study comes from the registered companies in the G-20 states. For the fabricating business, the 2007–2018 annual financial statements are obtained from the Thomson Reuters Data Stream and World Stock Exchange.

Design/methodology/approach

For the investigation, the panel data were analyzed from the period 2007–2018 by applying summary statistics of ordinary least square, correlation matrix and generalized method of moments.

Findings

The findings of this study suggest that Ln assets, dividends and investments have a positive association with the debt level. In addition, profitability and working capital were negatively associated with change in total debt under pecking order theory.

Research limitations/implications

The effects of the geographical location of the firms and current global economic downturn were accounted for the capital structure decisions and corporate performance of G-20 firms.

Originality/value

This study instigates observed phenomenon elicited from capital structure theory by applying analytical method, instead of describing them in terms of administrative selection, taking measure and chief financial officers risk preference. Finally, work is required to form new hypothesis and explore novel factors that could enrich academic scholars’ motivation.

Citation

Riaz, M., Jinghong, S. and Siddiqi, U.I. (2023), "A comparative analysis of capital structure of G-20 firms on regional basis", Pacific Accounting Review, Vol. 35 No. 1, pp. 86-104. https://doi.org/10.1108/PAR-07-2021-0123