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dc.titleDo multinational and domestic corporations differ in their leverage policies?
dc.contributor.authorPark, S.H.
dc.contributor.authorSuh, J.
dc.contributor.authorYeung, B.
dc.identifier.citationPark, S.H., Suh, J., Yeung, B. (2013). Do multinational and domestic corporations differ in their leverage policies?. Journal of Corporate Finance 20 (1) : 115-139. ScholarBank@NUS Repository.
dc.description.abstractThis paper examines the leverage policies of multinational corporations (MNCs) in comparison to those of domestic corporations (DCs). Prior studies document that MNCs have lower leverage levels. However, our analysis of U.S. firms over the period 1981-2010 reveals that the leverage levels of MNCs are not significantly lower than those of DCs if we control for key firm characteristics related to leverage levels. We also find that MNCs and DCs do not differ significantly in terms of their debt maturity structure, the speed of leverage adjustments, or the propensity to issue debt vs. equity (or vs. not to issue debt). The results suggest that MNCs' financial policies at the corporate level are not significantly influenced by their greater exposures, in comparison to DCs, to market imperfections such as taxes and regulations. Interestingly, however, our additional analysis of MNCs from outside the U.S. reveals that non-U.S. MNCs issue securities more frequently and adjust leverage faster than their domestic peers. © 2012.
dc.subjectCapital structure
dc.subjectSecurity issuance
dc.subjectSpeed of leverage adjustment
dc.contributor.departmentBUSINESS POLICY
dc.description.sourcetitleJournal of Corporate Finance
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