Determinants of leverage and agency problems: A regression approach with survey data

European Journal of Finance

Volumn 13, Issue 6, 2007, Pages 565-593

  De Jong, Abe ^a   Van Dijk, Ronald ^b  

^a ERASMUS UNIVERSITY   (Netherlands)

^b ING Investment Management   (Netherlands)

Author keywords

Agency problems; Capital structure; Corporate governance; Survey research; The Netherlands

Indexed keywords

EID: 34548587844     PISSN: 1351847X     EISSN: 14664364     Source Type: Journal    
DOI: 10.1080/13518470701198734     Document Type: Article

References (54)

1. Anderson, J.C. and Gerbing, D.W. (1988) Structural equations modeling in practice: A review and recommended two-step approach, Psychological Bulletin, 103, pp. 411-423.
2. Anderson, J.C. and Gerbing, D.W. (1992) Assumptions and comparative strengths of the two-step approach: Comment on Fornell and Yi, Sociological Methods and Research, 20, pp. 321-333.
3. Ang, J.S. and Jung, M. (1993) An alternative test of Myers' pecking order theory of capital structure: The case of South Korean firms, Pacific-Basin Finance Journal, 1, pp. 31-46.
4. Bancel, F. and Mittoo, U.R. (2004) The determinants of capital structure choice: A survey of European firms, Financial Management, 33, pp. 103-132.
5. Barclay, M.J. and Smith, C.W. (1995) The maturity structure of corporate debt, Journal of Finance, 50, pp. 609-631.
6. Becht, M. (1997) Strong blockholders, weak owners, and the need for European mandatory disclosure. Executive report, in The Separation of Ownership and Control: A Survey of 7 European Countries. Preliminary report to the European Commission submitted on 27 October 1997, Volume 1.
7. Berger, P.G., Ofek, E. and Yermack, D.L. (1997) Managerial entrenchment and capital structure decisions, Journal of Finance, 52, pp. 1411-1438.
8. Bollen, K.A. (1989) Structural Equations with Latent Variables (New York: John Wiley and Sons).
9. Brav, A., Graham., J.R. and Harvey, C.R. (2005) Payout policy in the 21st century, Journal of Financial Economics, 77, pp. 483-527.
10. Brounen, D., De Jong, A. and Koedijk, C.G. (2004) Corporate finance in Europe: Confronting theory and practice, Financial Management, 33, pp. 71-101.
11. Brounen, D., De Jong, A. and Koedijk, C.G. (2006) Capital structure policies in Europe: Survey evidence, Journal of Banking and Finance, 30, pp. 1409-1442.
12. Cliff, N. (1983) Some cautions concerning the application of causal modeling methods, Multivariate Behavioral Research, 18, pp. 115-126.
13. Cho, H.J. and Pucik, V. (2005) Relationship between innovativeness, quality, growth, profitability, and market value, Strategic Management Journal, 26, pp. 555-575.
14. Cools, K. (1993) Capital structure choice; confronting (meta) theory, empirical tests and executive opinion, PhD dissertation, Tilburg, the Netherlands.
15. DeAngelo, H. and Masulis, R. (1980) Optimal capital structure under corporate and personal taxation, Journal of Financial Economics, 8, pp. 3-30.
16. De Jong, A. (2002) The disciplining role of leverage in Dutch firms, European Finance Review, 6, pp. 31-62.
17. De Jong, A. and Veld, C.H. (2001) An empirical analysis of incremental capital structure decisions under managerial entrenchment, Journal of Banking and Finance, 25, pp. 1857-1895.
18. Fornell, C. and Yi, Y. (1992) Assumptions of the two-step approach to latent variable modeling, Sociological Methods and Research, 20, pp. 291-320.
19. Friend, I. and Lang, H.H.P. (1988) An empirical test of the impact of managerial self-interest on corporate capital structure, Journal of Finance, 43, pp. 271-281.
20. Grossman, S.J. and Hart, O. (1982) Corporate financial structure and managerial incentives, in: J. McCall (Ed.) The Economics of Information and Uncertainty, pp. 107-140 (Chicago: University of Chicago Press).
21. Graham, J.R. (1996) Debt and the marginal tax rate, Journal of Financial. Economics, 41, pp. 41-73.
22. Graham, J.R. and Harvey, C.R. (2001) The theory and practice of corporate finance: Evidence from the field, Journal of Financial Economics, 61, pp. 187-243.
23. Graham, J.R., Harvey, C.R. and Rajgopal, S. (2005) The economic implications of corporate financial reporting, Journal of Accounting and Economics, 40, pp. 3-73.
24. Graham, J.R., Lemmon, M.L. and Schallheim, J.S. (1998) Leases, taxes and the endogeneity of corporate tax states, Journal of Finance, 53, pp. 131-162.
25. Green, R.C. (1984) Investment incentives, debt, and warrants, Journal of Financial Economics, 13, pp. 115-135.
26. Haitovsky, Y. (1969) A note on the maximization of R2, The American Statistician, 23, pp. 20-21.
27. Hughes, M.A., Price, R.L. and Marrs, D.W. (1986) Linking theory construction and theory testing: Models with multiple indicators of latent variables, Academy of Management Review, 11, pp. 128-144.
28. Jensen, M.C. (1986) Agency costs of free cash flow, corporate finance, and take-overs, American Economic Review, 76, pp. 323-329.
29. Jensen, M.C. and Meckling, W.H. (1976) Theory of the firm: Managerial behavior, agency costs and ownership structure, Journal of Financial Economics, 3, pp. 305-360.
30. Jöreskog, K.G. and Sörbom, D. (1989) LISREL VII user's Reference Guide (Mooresville, IN: Scientific Software Inc.).
31. Jöreskog, K.G. and Sörbom, D. (1993) LISREL 8: Structural Equations Modeling with the Simplis Command Language (Mooresville, IN: Scientific Software Inc.).
32. Kabir, R., Cantrijn, D. and Jeunink, A. (1997) Takeover defenses, ownership structure and stock returns in the Netherlands: An empirical analysis, Strategic Management Journal, 18, pp. 97-109.
33. Lance, C.E., Cornwell, J.M. and Mulaik, S. A. (1988) Limited information parameter estimates for latent or mixed manifest and latent variable models, Multivariate Behavioral Research, 23, pp. 171-187.
34. Lang, L., Ofek, E. and Stulz, R.M. (1996) Leverage, investment, and firm growth, Journal of Financial Economics, 40, pp. 3-29.
35. Little, R.J.A. and Rubin, D.A. (1987) Statistical Analysis with Missing Data (New York: John Wiley and Sons).
36. MacKie-Mason, J.K. (1990) Do taxes effect corporate financing decision? Journal of Finance, 45, pp. 1471-1495.
37. Maksimovic, V. and Titman, S. (1991) Financial policy and reputation for product quality, Review of Financial Studies, 4, pp. 175-200.
38. McConnell, J.J. and Servaes, H. (1995) Equity ownership and the two faces of debt, Journal of Financial Economics, 39, pp. 131-157.
39. Mehran, H. (1992) Executive incentive plans, corporate control, and capital structure, Journal of Financial and Quantitative Analysis, 27, pp. 539-560.
40. Modigliani, F. and Miller, M.H. (1958) The cost of capital, corporation finance, and the theory of investment, American Economic Review, 48, pp. 261-297.
41. Modigliani, F. and Miller, M.H. (1963) Corporate income taxes and the cost of capital: A correction, American Economic Review, 53, pp. 433-443.
42. Myers, S.C. (1977) Determinants of corporate borrowing, Journal of Financial Economics, 5, pp. 147-175.
43. Myers, S.C. (1984) The capital structure puzzle, The Journal of Finance, 39, pp. 575-592.
44. Prowse, S.D. (1992) The structure of corporate ownership in Japan, Journal of Finance, 47, pp. 1121-1140.
45. Rajan, R.G. and Zingales, L. (1995) What do we know about capital structure? Some evidence from international data, Journal of Finance, 50, pp. 1421-1460.
46. Shleifer, A. and Vishny, R. W. (1997) A survey of corporate governance, Journal, of Finance, 52, pp. 737-783.
47. Smith, C.W. and Warner, J.B. (1979) On financial contracting: An analysis of bond covenants, Journal of Financial Economics, 7, pp. 117-161.
48. Smith, C.W. and Watts, L. (1992) The investment opportunity set and corporate financing, dividend, and compensation policies, Journal of Financial Economics, 32, pp. 263-292.
49. Stulz, R.M. and Johnson, H. (1985) An analysis of secured debt, Journal of Financial Economics, 14, pp. 501-522.
50. Titman, S. (1984) The effect of capital structure on a firm's liquidation decision, Journal of Financial Economics, 13, pp. 137-151.
51. Titman, S. and Wessels, R. (1988) The determinants of capital structure choice, Journal of Finance, 43, pp. 1-19.
52. Van Melle, H. (1997) Optieplannen en corporate governance (Amsterdam: Dutch Corporate Governance Series, part 3, in Dutch).
53. Wouters, M., Anderson, J.C. and Wynstra, F. (2005) The adoptation of total cost of ownership of sourcing decisions - A structural equations analysis, Accounting, Organizations and Society, 30, pp. 167-191.
54. Zwiebel, J. (1996) Dynamic capital structure under managerial entrenchment, American Economic Review, 86, pp. 1197-1215.