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Impact of Financial Crisis on Firms’ Capital Structure in UK, France, and Germany

Kume, Ortenca, Iqbal, Abdullah (2014) Impact of Financial Crisis on Firms’ Capital Structure in UK, France, and Germany. Multinational Finance Journal, 18 (3/4). pp. 249-280. ISSN 1096-1879. (Access to this publication is currently restricted. You may be able to access a copy if URLs are provided) (KAR id:46656)

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Abstract

This study examines the impact of the recent financial crisis on the capital structure decision of UK, French and German firms. The results show that overall leverage ratios increase from pre-crisis (2006 and 2007) to crisis (2008 and 2009) years and then decrease in the post-crisis (2010 and 2011) years. Both equity and debt levels change during the crisis and post-crisis years. The findings further reveal that firms with lower than industry average capital structure ratios in the pre-crisis period experience a gradual increase in their leverage during crisis and post-crisis periods. However, firms with higher than industry average capital structure ratios in the pre-crisis periods experience a significant decrease in the leverage ratios particularly in the post-crisis period mainly due to changes in their equity levels.

Item Type: Article
Uncontrolled keywords: financial crisis; capital structure; leverage, UK, France, Germany
Subjects: H Social Sciences > HG Finance
Divisions: Divisions > Kent Business School - Division > Kent Business School (do not use)
Depositing User: Ortenca Kume
Date Deposited: 13 Jan 2015 15:24 UTC
Last Modified: 16 Feb 2021 13:22 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/46656 (The current URI for this page, for reference purposes)
Iqbal, Abdullah: https://orcid.org/0000-0002-3013-1007
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