Topic: The Determinants of Capital Structure: The Evidence of German Firms
In my paper, I will run the regression showing what are the variables determining capital structure of the firm. The explanatory variables are size, profitability, growth opportunity, tangibility, tax, non-debt tax shield, industry classification and volatility. The relationships between capital structure and those variables will be analysed. So in the literature review please include 1. All the important theories about capital structure; three main theories are Modigliani and Miller?s irrelevance proposition, trade-off theories,and pecking order theories 2. Tell the stories and findings of capital structure over time. 3. Please include all the important papers. Provide deep discussions and give clear results of each paper. 4. Give the findings of other paper about the relationships between capital structure and those influential variables (size, profitability, growth opportunity, tangibility, tax, non-debt tax shield, volatility, industry classification) 5. Give the similarities and differences of capital structure between listed and non-listed companies
(This is just a brief information, we should discuss more in detail)
The list of References that I would like to include in the literature 1 ANGELO, H. de ? MASULIS, R. (1980): Optimal Capital Structure under Corporate and Per-sonal Taxation. Journal of Financial Economics, vol. 8, 1980, pp. 3?29. 2. BAUER, P. ? BUB?K, V. (2003): Informative Value of Firm Capital Structure. Prague Economic Papers, vol. 12, 2003, pp. 233?248. 3. BOOTH, L. ? AIVAZIAN, V. ? DEMIRGUC-KUNT, A. ? MAKSIMOVIC, V. (2001): Capital Struc-ture in Developing Countries. Journal of Finance, vol. 56, 2001, pp. 87?130. 4. BRADLEY, M. ? JARRELL, G. ? KIM, E. H. (1984): On the Existence of an Optimal Capital Structure: Theory and Evidence. Journal of Finance, vol. 39, 1984, pp. 857?878. 5. CHAPLINSKY, S. ? NIEHAUS, G. (1993): Do Inside Ownership and Leverage Share Common Determinants? Quarterly Journal of Business and Economics, vol. 32, 1993, pp. 51?65. 6. FAMA, E. F. ? FRENCH, K. R. (1998): The Corporate Cost of Capital and the Return on Cor- porate Investment. Center for Research in Security Prices, University of Chicago, Working Pa- per. 7. FRIEND, I. ? HASBROUCK, J. (1988): Determinants of Capital Structure. In: Chen, A. (ed.): Research in Finance, vol. 7. JAI Press Inc., New York, pp. 1?19. 8. FRIEND, I. ? LANG, L. (1988): An Empirical Test of the Impact of Managerial Self-interest on Corporate Capital Structure. Journal of Finance, vol. 43, 1988, pp. 271?281. 9. GONEDES, N. J. ? LANG, L. ? CHIKAONDA, M. (1988): Empirical Results on Managerial In- centives and Capital Structure. The Wharton School, University of Pennsylvania, Working Pa- per. 10. HARRIS, M. ? RAVIV, A. (1991): The Theory of Capital Structure. Journal of Finance, vol. 46, 1991, pp. 297?355. 11. HSIA, C. C. (1981): Coherence of the Modern Theories of Finance. Financial Review, vol. 16, 1981, pp. 27?42. 12. HUANG, S. G. ? SONG, F. M. (2002): The Determinants of Capital Structure: Evidence from China. Hong Kong Institute of Economics and Business Strategy, Working Paper, 2002, no. 1042. 13. JENSEN, M. C. (1986): Agency Costs of Free Cash-flow, Corporate Finance, and Takeovers. American Economic Review, vol. 76, 1986, pp. 323?329. 14, JENSEN, M. C. ? MECKLING, W. H. (1976): Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, vol. 3, 1976, pp. 305?360. 15. KESTER, C. W. (1986): Capital and Ownership Structure: A Comparison of United States and Japanese Manufacturing Corporations. Financial Management, vol. 15, 1986, pp. 5?16. 16. KIM, W. S. ? SORENSEN, E. H. (1986): Evidence on the Impact of the Agency Costs of Debt in Corporate Debt Policy. Journal of Financial and Quantitative Analysis, vol. 21, 1986, pp. 131?144. 17. KLEIN, L. S. ? O?BRIEN, T. J. ? PETERS, S. R. (2002): Debt vs. Equity and Asymmetric In- formation: A Review. Financial Review, vol. 37, 2002, pp. 317?350. 18. LONG, M. ? MALITZ, I. (1985): The Investment-financing Nexus: Some Empirical Evidence. Midland Corporate Finance Journal, vol. 3, 1985, pp. 53?59. 19. MacKIE-MASON, J. K. (1990): Do Taxes Affect Corporate Financing Decisions? Journal of Fi- nance, vol. 45, 1990, pp. 1471?1493. 20. MARSH, P. (1982): The Choice between Equity and Debt: An Empirical Study. Journal of Fi- nance, vol. 37, 1982, pp. 121?144. 21. MODIGLIANI, F. ? MILLER, M. (1958): The Cost of Capital, Corporation Finance, and the The- ory of Investment. American Economic Review, vol. 48, 1958, pp. 261?297. 22. MYERS, S. C. (1984): The Capital Structure Puzzle. Journal of Finance, vol. 39, 1984, pp. 581?582. 23. MYERS, S. C. (2001): Capital Structure. Journal of Economic Perspectives, vol. 15, 2001, pp. 81?102. 24. MYERS, S. C. ? MAJLUF, N. S. (1984): Corporate Financing and Investment Decisions when Firms have Information the Investors do not have. Journal of Financial Economics, vol. 13, 1984, pp. 187?221. 25. RAJAN, R. G. ? ZINGALES, L. (1995): What Do We Know about Capital Structure? Some Evi- dence from International Data. Journal of Finance, vol. 50, 1995, pp. 1421?1460. 26. ROSS, S. (1977): The Determination of Financial Structure: the Incentive-signalling Approach. Bell Journal of Economics and Management Science, vol. 8, 1977, pp. 23?40. 27. TITMAN, S. (1984): The Effect of Capital Structure on a Firm?s Liquidation Decision. Journal of Financial Economics, vol. 13, 1984, pp. 137?151. 28. TITMAN, S. ? WESSELS, R. (1988): The Determinants of Capital Structure Choice. Journal of Finance, vol. 43, 1988, pp. 1?19. 29. WALD, J. K. (1999): How Firm Characteristics Affect Capital Structure: An International Com- parison. Journal of Financial Research, vol. 22, 1999, pp. 161?187. 30. Graham, J.R. 1999 ?Do personal taxes affect corporate financing decisions 31. Graham, J.R. 2000 ?How big are the tax benefits of debt 32. Fama and French 2002, ? Testing Trade-off and pecking order predictions about dividends and debt? 33. Jose Lopez-Gracia and Francisco Sogorb-Mira (2008) ?Testing trade-off and pecking order theories financing SMEs 34. Buettner, T., Overesch, M. (2006) ?TAXATION AND CAPITAL STRUCTURE CHOICE ? EVIDENCE FROM A PANEL OF GERMAN MUL TINA TIONALS?