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Dynamic adjustment towards target capital structure: Thailand evidence

By employing panel data, the present study examines the dynamic aspects of capital structure of 269 non-financial listed firms in Thailand from 2000 to 2009. This is a relatively new area in finance literature. The present study investigates the existence of target capital structure, speed of adjust...

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Main Authors: Razali Haron,, Khairunisah Ibrahim,, Fauzias Mat Nor,, Izani Ibrahim,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2013
Online Access:http://journalarticle.ukm.my/6986/1/4986-13953-1-PB.pdf
http://journalarticle.ukm.my/6986/
http://ejournals.ukm.my/pengurusan/index
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spelling my-ukm.journal.69862016-12-14T06:42:47Z http://journalarticle.ukm.my/6986/ Dynamic adjustment towards target capital structure: Thailand evidence Razali Haron, Khairunisah Ibrahim, Fauzias Mat Nor, Izani Ibrahim, By employing panel data, the present study examines the dynamic aspects of capital structure of 269 non-financial listed firms in Thailand from 2000 to 2009. This is a relatively new area in finance literature. The present study investigates the existence of target capital structure, speed of adjustment and factors affecting the speed of adjustment. The analyses are conducted using the dynamic Partial Adjustment Model (PAM) and estimated based on the Generalized Method of Moments. The results indicate the existence of target capital structure and firms undergone adjustment processes to be at their target capital structure from time to time with a considerably rapid speed of adjustment, consistent with the dynamic trade-off theory. Firms in Thailand are found to be under-adjusting, being below the required adjustment to be at the target within a year. Strong evidence exists that indicates that firm specific factors significantly influence speed of adjustment for firms in Thailand, such as distance from target, size of firm and profitability. Penerbit Universiti Kebangsaan Malaysia 2013 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/6986/1/4986-13953-1-PB.pdf Razali Haron, and Khairunisah Ibrahim, and Fauzias Mat Nor, and Izani Ibrahim, (2013) Dynamic adjustment towards target capital structure: Thailand evidence. Jurnal Pengurusan, 39 . pp. 73-82. ISSN 0127-2713 http://ejournals.ukm.my/pengurusan/index
institution Universiti Kebangsaan Malaysia
building Perpustakaan Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description By employing panel data, the present study examines the dynamic aspects of capital structure of 269 non-financial listed firms in Thailand from 2000 to 2009. This is a relatively new area in finance literature. The present study investigates the existence of target capital structure, speed of adjustment and factors affecting the speed of adjustment. The analyses are conducted using the dynamic Partial Adjustment Model (PAM) and estimated based on the Generalized Method of Moments. The results indicate the existence of target capital structure and firms undergone adjustment processes to be at their target capital structure from time to time with a considerably rapid speed of adjustment, consistent with the dynamic trade-off theory. Firms in Thailand are found to be under-adjusting, being below the required adjustment to be at the target within a year. Strong evidence exists that indicates that firm specific factors significantly influence speed of adjustment for firms in Thailand, such as distance from target, size of firm and profitability.
format Article
author Razali Haron,
Khairunisah Ibrahim,
Fauzias Mat Nor,
Izani Ibrahim,
spellingShingle Razali Haron,
Khairunisah Ibrahim,
Fauzias Mat Nor,
Izani Ibrahim,
Dynamic adjustment towards target capital structure: Thailand evidence
author_facet Razali Haron,
Khairunisah Ibrahim,
Fauzias Mat Nor,
Izani Ibrahim,
author_sort Razali Haron,
title Dynamic adjustment towards target capital structure: Thailand evidence
title_short Dynamic adjustment towards target capital structure: Thailand evidence
title_full Dynamic adjustment towards target capital structure: Thailand evidence
title_fullStr Dynamic adjustment towards target capital structure: Thailand evidence
title_full_unstemmed Dynamic adjustment towards target capital structure: Thailand evidence
title_sort dynamic adjustment towards target capital structure: thailand evidence
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2013
url http://journalarticle.ukm.my/6986/1/4986-13953-1-PB.pdf
http://journalarticle.ukm.my/6986/
http://ejournals.ukm.my/pengurusan/index
_version_ 1643736965784272896
score 13.226497

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