Impact of Financial Crises on Dynamics of Capital Structure: Evidence from Korean Listed Companies
TsoyLyubov (Sogang University, The Graduate School)
- 주제(키워드) capital structure , optimal leverage , speed of adjustment , Korean listed companies , unbalanced panel data , financial crises , dynamic model , chaebols
- 발행기관 Sogang University, The Graduate School
- 지도교수 Almas Heshmati
- 발행년도 2017
- 학위수여년월 2017. 2
- 학위명 석사
- 학과 및 전공 일반대학원 경제학과
- 실제URI http://www.dcollection.net/handler/sogang/000000061415
- 본문언어 영어
- 저작권 서강대학교 논문은 저작권보호를 받습니다.
- 초록 moremore
- This study examines the impact of the 1997 Asian and the 2008 global financial crises on the capital structure of Korean non-financial listed companies. Using a data set covering 1,159 Korean listed non-financial firms from 10 industrial sectors over a 31-year period, specifically 1985-2015, this st...
- This study examines the impact of the 1997 Asian and the 2008 global financial crises on the capital structure of Korean non-financial listed companies. Using a data set covering 1,159 Korean listed non-financial firms from 10 industrial sectors over a 31-year period, specifically 1985-2015, this study investigates the pattern of firms’ capital structure before and after the crises and identifies the speed of adjustment toward the optimal leverage. Unbalanced panel data was used in the estimation. The study finds different effects of two crises on both capital structure and adjustment speed. The average debt ratio fell significantly after the 1997 Asian crisis. The distance between optimal and observed debt ratios shrank after the Asian crisis, while the speed of adjustment increased twofold. Unlike the Asian crisis, the global crisis of 2008 was found to have a positive effect on companies’ debt ratio and the speed of their adjustment toward optimal leverage. The empirical analysis revealed that Korean non-financial listed companies on average decreased their debt ratios over the entire period of observation, with leverage being highest before the Asian crisis and lowest after the global financial crisis. The results also show that the debt ratio of Korean chaebols is higher than that of non-chaebols. Moreover, the high level of leverage of Korean firms have found to be associated with tangible assets, income variability, size and age of the firm, non-debt tax shield, and uniqueness.