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Impact of financial crisis on capital structure of European firms

Iqbal, Abdullah, Kume, Ortenca (2013) Impact of financial crisis on capital structure of European firms. In: 20th Annual Conference of the Multinational Finance Society 2013, 30 Jun - 3 Jul 2013, Izmir, Turkey. (Unpublished) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)

Abstract

World economies experienced a major financial and banking crisis during the first decade of 21st century. This study examines the impact of this financial crisis on capital structure decision of UK industrial firms. Our results show that firms first increase their leverage ratios from pre-crisis (2006 and 2007) to crisis (2008 and 2009) years and then decrease it in the post-crisis (2010 and 2011) years. Firms use both debt and equity to manage their capital structure however, they rely more heavily on short term debt rather than long term debt during the crisis years. Our results also reveal that firm with lower than industrial average capital structure ratio in the pre-crisis years gradually increase their leverage during crisis and post-crisis years. However, firms with higher than industrial average capital structure ratios in the pre-crisis years steadily decrease their leverage by improving their equity levels.

Item Type: Conference or workshop item (Paper)
Uncontrolled keywords: Financial crisis; capital structure; Europe; leverage ratio.
Subjects: H Social Sciences > HG Finance
Divisions: Faculties > Social Sciences > Kent Business School > Accounting and Finance
Depositing User: Abdullah Iqbal
Date Deposited: 28 Nov 2017 10:46 UTC
Last Modified: 29 May 2019 19:55 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/64808 (The current URI for this page, for reference purposes)
Iqbal, Abdullah: https://orcid.org/0000-0002-3013-1007
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