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Title
Abstract
Figures
Data, Variables, and Research Methods
Macro Financial Data
Firm-Level Data and Variables
Panel Data Analysis
Empirical Results
Dynamic Panel Data Estimation Results
Conclusion
References
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International and Area Studies

Capital Structure and Debt Maturity: Evidence from Emerging Markets

Profile image of Cesario MateusCesario Mateus

2006

Abstract

This paper analyses the joint determination of capital structure and debt maturity of the firm for a large sample of countries from Latin America and Eastern Europe. To our knowledge this is the first time such study has been attempted for a multi-country emerging market sample. Employing dynamic panel data analysis, we test Barclay, Marx, and Smith Jr.'s (2003) model of joint capital structure and debt maturity determination using the Generalized Method of Moments on a system of structural equations. The empirical results support three main findings. First, capital structure and debt maturity are policy complements in Latin America and policy substitutes in Eastern Europe. Second, there is a substantial dynamic component in the determination of the endogenous variables that have been neglected by previous research.

Figures (13)
TABLE 1. MACRO FINANCIAL DATA. The data presented below are from the Financial Structure Database (World Bank, 2005a) and World Development Indi Online (World Bank, 2005b). The sample consists of yearly observations for each country over the period 1990-2003 (unless indicated otherwise), depending or availability. EE-7” refers to the simple average of country-level data for Bulgaria, Czech Republic, Latvia, Lithuania, Poland, Romania and Russia, and “LA-7” ref the simple average of country-level data for Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela. °DF created with pdfFactory trial version www.pdffactory.cor
TABLE 1. MACRO FINANCIAL DATA. The data presented below are from the Financial Structure Database (World Bank, 2005a) and World Development Indi Online (World Bank, 2005b). The sample consists of yearly observations for each country over the period 1990-2003 (unless indicated otherwise), depending or availability. EE-7” refers to the simple average of country-level data for Bulgaria, Czech Republic, Latvia, Lithuania, Poland, Romania and Russia, and “LA-7” ref the simple average of country-level data for Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela. °DF created with pdfFactory trial version www.pdffactory.cor
PANEL B: EASTERN EUROPE PANEL A: LATIN AMERICA (continued)
PANEL B: EASTERN EUROPE PANEL A: LATIN AMERICA (continued)
PANEL B: EASTERN EUROPE (continued)
PANEL B: EASTERN EUROPE (continued)

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