Macroeconomic Conditions and Capital Structure over the Business Cycle: Further Evidence in the Context of Taiwan
MetadataShow full item record
The authors examine the effect of macroeconomic conditions on the capital structure of firms in the petrochemical, textile, and electronics industries of Taiwan during the period 1983-2007, which covers six and a half business cycles. Controlling for the effects of economic growth, industry type, and firm-specific factors, we find that macroeconomic conditions have a significant effect on debt ratios during the sample period. Debt ratios of firms in these industries are procyclical during the period before the 1997-98 Asian financial crisis, but countercyclical during the period after the Asian financial crisis.
Emerging Markets Finance and Trade
© 2012 M. E. Sharpe, INC. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal website for access to the definitive, published version.