资本结构的影响：对加纳上市公司盈利的实证分析外文文献翻译
资本结构和企业价值之间的关系对公司治理的影响[外文翻译]
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外文翻译The influence of corporate governance on the relation betweencapital structure and valueMaterial Source:Corporate Governance Author:Maurizio La Rocca Researches in Business Economics, and in particular, in Business economics and Finance have always analyzed the processes of economic value creation as their main field of studies. Starting from the provocative work of Modigliani and Miller (1958), capital structure became one of the main elements that following studies have shown as being essential in determining value. Half a century of research on capital structure attempted to verify the presence of an optimal capital structure that could amplify the company’s ability to create value.There is again quite a bit of interest in the topic of firm capital structure, on whether or not it is necessary to consider the important contribution offered by corporate governance as a variable that can explain the connection between capital structure and value, controlling opportunistic behavior in the economic relations between shareholders, debt holders and managers. In this sense, capital structure can influence firm value.Therefore, this paper examines the theoretical relationship between capital structure, corporate governance and value, formulating an interesting proposal for future research. The second paragraph describes the theoretical and empirical approach on capital structure and value, identifying the main threads of study. After having explained the concept of corporate governance and its connection with firm value, the relationship between capital structure, corporate governance and value, as well as the causes behind them, will be investigated.Capital structure: relation with corporate value and main research streams When looking at the most important theoretical contributions on the relation between capital structure and value, it becomes immediately evident that there is a substantial difference between the early theories and the more recent ones. Influence of corporate governance on the relation between capital structure and valueCapital structure can be analyzed by looking at the rights and attributes that characterize the firm’s assets and that influence, with different levels of intensity,governance activities. Equity and debt, therefore, must be considered as both financial instruments and corporate governance instruments. (Williamson, 1988): debt subordinates governance activities to stricter management, while equity allows for greater flexibility and decision making power. It can thus be inferred that when capital structure becomes an instrument of corporate governance, not only the mix between debt and equity and their well known consequences as far as taxes go must be taken into consideration. The way in which cash flow is allocated and, even more importantly, how the right to make decisions and manage the firm (voting rights) is dealt with must also be examined. For example, venture capitalists are particularly sensitive to how capital structure and financing contracts are laid out, so that an optimal corporate governance can be guaranteed while incentives and checks for management behavior are well established (Zingales, 2000).How corporate governance can potentially have a relevant influence on the relation between capital structure and value, with an effect of mediation and/or moderation.On one hand, a change in how debt and equity are dealt with influences firm governance activities by modifying the structure of incentives and managerial control. If, through the mix debt and equity, different categories of investors all converge within the firm, where they have different types of influence on governance decisions, then managers will tend to have preferences when determining how one of these categories will prevail when d efining the firm’s capital structure. Even more importantly, through a specific design of debt contracts and equity it is possible to considerably increase firm governance efficiency.On the other hand, even corporate governance influences choices regarding capital structure. Myers (1984) and Myers and Majluf (1984) show how firm financing choices are made by management following an order of preference; in this case, if the manager chooses the financing resources it can be presumed that she is avoiding a reduction of her decision making power by accepting the discipline represented by debt. Internal resource financing allows management to prevent other subjects from intervening in their decision making processes. De Jong (2002) reveals how in the Netherlands managers try to avoid using debt so that their decision making power remains unchecked. Zwiebel (1996) has observed that managers don’t voluntarily accept the ‘‘discipline’’ of debt; other governance mechanisms impose that debt is issued. Jensen (1986) noted that decisions to increase firm debt are voluntarily made by management when it intends to‘‘reassure’’ stakeholders that its governance decisions are ‘‘proper’’.The B-C-A relation that indicates the relation between capital structure a nd value is actually explained thanks to a third variable (corporate governanc e) that ‘‘intervenes’’ (and for this reason is called an ‘‘intervening variable’’) in the relation between capital structure and value. This would create a ‘‘bri dge’’ by mediating between lever age and value, thus showing a connection th at otherwise would not be visible. It can not be said that there is no relation between capital structure and value (Modigliani and Miller, 1958), but the c onnection is mediated and, in an economic sense, it is formalized through a causal chain between variables. In other words, it is not possible to see a dir ect relation between capital structure and value, but in reality capital structure influences firm governance that is connected to firm value.Furthermore, the relation between capital structure and corporate governan ce becomes extremely important when considering its fundamental role in val ue generation and distribution (Bhagat and Jefferis, 2002). Through its interact ion with other instruments of corporate governance, firm capital structure bec omes capable of protecting an efficient value creation process, by establishing the ways in which the generated value is later distributed (Zingales, 1998); i n other words the surplus created is influenced (Zingales, 2000).Therefore, the relation between capital structure and value could be set u p differently if it were mediated or moderated by corporate governance. None theless, capital structure could also intervene or interact in the relation betwee n corporate governance and value. In this manner a complementary relationshi p, or one where substitution is possible, could emerge between capital structu re and other corporate governance variables. Debt could have a marginal role of disciplining management when there is a shareholder participating in own ership or when there is state participation. To the contrary, when other forms of discipline are lacking in the governance structure, capital structure could be exactly the mechanism capable of protecting efficient corporate governance, while preserving firm value.ConclusionThis paper defines a theoretical approach that can contribute in clearing up the relation between capital structure, corporate governance and value, whi le they also promote a more precise design for empirical research. Capital str ucture represents one of many instruments that can preserve corporate governance efficiency and protect its ability to create value . Therefore, this thread of research affirms that if investment policies allow for value creation, financing policies, together with other governance instruments, can assure that invest ment policies are carried out efficiently while firm value is protected from op portunistic behavior.In conclusion, this paper defines a theoretical model that contributes to c larifying the relations between capital structure, corporate governance and firm value, while promoting, as an aim for future research, a verification of the validity of this model through application of the analysis to a wide sample of firms and to single firms. To study the interaction between capital structure, corporate governance and value when analyzing a wide sample of firms, loo k at problems of endogeneity and reciprocal causality, and make sure there is complementarity between all the three factors. Such an analysis deserves the application of refined econometric techniques. Moreover, these relations shoul d be investigated in a cross-country analysis, to catch the role of country-spe cific factors.译文资本结构和企业价值之间的关系对公司治理的影响资料来源:公司治理作者：莫里吉奥拉罗卡在商业经济的研究中，尤其是经营经济学和金融学，总是将分析创造经济价值的进程作为他们研究的主要领域。
资本结构外文文献翻译
资本结构外文文献翻译外文资料翻译—英文原文How Important is Financial Risk?IntroductionThe financial crisis of 2008 has brought significant attention tothe effects of financial leverage. There is no doubt that the highlevels of debt financing by financial institutions and households significantly contributed to the crisis. Indeed, evidence indicates that excessive leverage orchestrated by major global banks (e.g., through the mortgage lending and collateralized debt obligations) and the so-called “shadowbanking system” may be the underlying cause of the recent economic and financialdislocation. Less obvious is the role of financial leverage among nonfinancial firms. To date, problems in the U.S. non-financial sector have been minor compared to the distress in the financial sector despite the seizing of capital markets during the crisis. For example, non-financial bankruptcies have been limited given that the economic decline is the largest since the great depression of the 1930s. In fact, bankruptcy filings of non-financial firms have occurred mostly in U.S. industries (e.g., automotive manufacturing, newspapers, and real estate) that faced fundamental economic pressures prior to the financial crisis.This surprising fact begs the question, “How important is financialrisk for non-financial firms?” At the heart of this issue is the uncertainty about the determinants of total firm risk as well as components of firm risk.StudyRecent academic research in both asset pricing and corporate finance has rekindled an interest in analyzing equity price risk. A current strand of the asset pricing literature examines the finding of Campbell et al. (2001) that firm-specific (idiosyncratic) risk has tended to increase over the last 40 years. Other work suggests that idiosyncratic risk may be a priced risk factor (see Goyal and Santa-Clara, 2003, among others). Also related to these studies is work by Pástor and Veronesi (2003) showing how investor uncertainty about firm profitability is an important determinant of idiosyncratic risk and firm value. Other research has examined the role of equity volatility in bond pricing (e.g., Dichev, 1998, Campbell, Hilscher, and Szilagyi, 2008).However, much of the empirical work examining equity price risktakes the risk of assets as given or tries to explain the trend in idiosyncratic risk. In contrast, this外文资料翻译—英文原文paper takes a different tack in the investigation of equity price risk. First, we seek to understand the determinants of equity price risk at the firm level by considering total risk as the product of risks inherent in the firms operations (i.e., economic or business risks) andrisks associated with financing the firms operations (i.e., financial risks). Second, we attempt to assess the relative importance of economic and financial risks and the implications for financial policy.Early research by Modigliani and Miller (1958) suggests thatfinancial policy may be largely irrelevant for firm value because investors can replicate many financial decisions by the firm at a low cost (i.e., via homemade leverage) and well-functioningcapital markets should be able to distinguish between financial and economic distress. Nonetheless, financial policies, such as adding debt to the capital structure, can magnify the risk of equity. In contrast, recent research on corporate risk management suggests that firms mayalso be able to reduce risks and increase value with financial policies such as hedging with financial derivatives. However, this research is often motivated by substantial deadweight costs associated withfinancial distress or other market imperfections associated withfinancial leverage. Empirical research provides conflicting accounts of how costly financial distress can be for a typical publicly traded firm.We attempt to directly address the roles of economic and financialrisk by examining determinants of total firm risk. In our analysis we utilize a large sample of non-financial firms in the United States. Our goal of identifying the most important determinants of equity price risk (volatility) relies on viewing financial policy as transforming asset volatility into equity volatility via financial leverage. Thus, throughout the paper, we consider financial leverage as the wedgebetween asset volatility and equity volatility. For example, in a static setting, debt provides financial leverage that magnifies operating cash flow volatility. Because financial policy is determined by owners (and managers), we are careful to examine the effects of firms? asset and operating characteristics on financial policy. Specifically, we examine a variety of characteristics suggested by previous research and, as clearly as possible, distinguish between those associated with the operations of the company (i.e. factors determining economic risk) and those associated with financing the firm (i.e. factors determining financial risk). We then allow economic risk to be a determinant of financial policy in the structural framework of Leland and Toft (1996), or alternatively,外文资料翻译—英文原文in a reduced form model of financial leverage. An advantage of the structural model approach is that we are able to account for both the possibility of financial and operating implications of some factors (e.g., dividends), as well as the endogenous nature of the bankruptcy decision and financial policy in general.Our proxy for firm risk is the volatility of common stock returns derived from calculating the standard deviation of daily equity returns. Our proxies for economic risk are designed to capture the essential characteristics of the firms? operations andassets that determine the cash flow generating process for the firm. For example, firm size and age provide measures of line of- businessmaturity; tangible assets (plant, property, and equipment) serve as ap roxy for the …hardness? of a firm?s assets;capital expenditures measure capital intensity as well as growth potential. Operating profitability and operating profit volatility serve as measures of the timeliness and riskiness of cash flows. To understand how financial factors affect firm risk, we examine total debt, debt maturity, dividend payouts, and holdings of cash and short-term investments.The primary result of our analysis is surprising: factorsdetermining economic risk for a typical company explain the vastmajority of the variation in equity volatility.Correspondingly, measures of implied financial leverage are much lower than observed debt ratios. Specifically, in our sample covering 1964-2008 average actual net financial (market) leverage is about 1.50 compared to our estimates of between 1.03 and 1.11 (depending on model specification and estimation technique). This suggests that firms may undertake other financial policies to manage financial risk and thus lower effective leverage to nearly negligible levels. These policies might include dynamically adjusting financial variables such as debt levels, debt maturity, or cash holdings (see, for example, Acharya, Almeida, and Campello, 2007). In addition, many firms also utilize explicit financial risk management techniques such as the use of financial derivatives, contractual arrangements with investors (e.g. lines of credit, call provisions in debt contracts, or contingencies insupplier contracts), special purpose vehicles (SPVs), or other alternative risk transfer techniques.The effects of our economic risk factors on equity volatility are generally highly statistically significant, with predicted signs. In addition, the magnitudes of the effects are substantial. We find that volatility of equity decreases with the size and age of the firm. Thisis intuitive since large and mature firms typically have more stable lines of英文原文外文资料翻译—business, which should be reflected in the volatility of equity returns. Equity volatility tends to decrease with capital expenditures though the effect is weak. Consistent with the predictions of Pástor and Veronesi (2003), we find that firms with higher profitability and lower profit volatility have lower equity volatility. This suggests that companies with higher and more stable operating cash flows are less likely to go bankrupt, and therefore are potentially less risky. Among economic risk variables, the effects of firm size, profit volatility, and dividend policy on equity volatility stand out. Unlike some previous studies, our careful treatment of the endogeneity of financial policy confirms that leverage increases total firm risk. Otherwise, financial risk factors are not reliably related to total risk.Given the large literature on financial policy, it is no surprise that financial variables are,at least in part, determined by the economic risks firms take. However, some of the specific findings areunexpected. For example, in a simple model of capital structure, dividend payouts should increase financial leverage since they represent an outflow of cash from the firm (i.e., increase net debt). We find that dividends are associated with lower risk. This suggests that paying dividends is not as much a product of financial policy as a characteristic of a firm?s operations (e.g., a maturecompany with limited growth opportunities). We also estimate how sensitivities to different risk factors have changed over time. Our results indicate that most relations are fairly stable. One exception is firm age which prior to 1983 tends to be positively related to risk and has since been consistently negatively related to risk. This is related to findings by Brown and Kapadia (2007) that recent trends in idiosyncratic risk are related to stock listings by younger and riskier firms.Perhaps the most interesting result from our analysis is that our measures of implied financial leverage have declined over the last 30 years at the same time that measures of equity price risk (such as idiosyncratic risk) appear to have been increasing. In fact, measures of implied financial leverage from our structural model settle near 1.0 (i.e., no leverage) by the end of our sample. There are several possible reasons for this. First, total debt ratios for non-financial firms have declined steadily over the last 30 years, so our measure of implied leverage should also decline. Second, firms have significantly increased cash holdings, so measures of net debt (debtminus cash and short-term investments) have also declined. Third, the composition of publicly traded firms has changed with more risky (especially technology-oriented)英文原文外文资料翻译—firms becoming publicly listed. These firms tend to have less debtin their capital structure. Fourth, as mentioned above, firms can undertake a variety of financial risk management activities. To the extent that these activities have increased over the last few decades, firms will have become less exposed to financial risk factors.We conduct some additional tests to provide a reality check of our results. First, we repeat our analysis with a reduced form model that imposes minimum structural rigidity on our estimation and find very similar results. This indicates that our results are unlikely to be driven by model misspecification. We also compare our results with trends in aggregate debt levels for all U.S. non-financial firms andfind evidence consistent with our conclusions. Finally, we look at characteristics of publicly traded non-financial firms that file for bankruptcy around the last three recessions and find evidence suggesting that these firms are increasingly being affected by economic distress as opposed to financial distress.ConclusionIn short, our results suggest that, as a practical matter, residual financial risk is now relatively unimportant for the typical U.S. firm. This raises questions about the level of expected financial distresscosts since the probability of financial distress is likely to be lower than commonly thought for most companies. For example, our results suggest that estimates of the level of systematic risk in bond pricing may be biased if they do not take into account the trend in implied financial leverage (e.g., Dichev, 1998). Our results also bring into question the appropriateness of financial models used to estimatedefault probabilities, since financial policies that may be difficult to observe appear to significantly reduce risk. Lastly, our results imply that the fundamental risks born by shareholders are primarily related to underlying economic risks which should lead to a relatively efficient allocation of capital.Some readers may be tempted to interpret our results as indicating that financial risk does not matter. This is not the proper interpretation. Instead, our results suggest that firms are able to manage financial risk so that the resulting exposure to shareholders is low compared to economic risks. Of course, financial risk is important to firms that choose to take on such risks either through high debt levels or a lack of risk management. In contrast, our study suggeststhat the typical non-financial firm chooses not to take these risks. In short, gross financial risk may be important, but firms can manage it. This contrasts with fundamental economic and business risks that 外文资料翻译—英文原文are more difficult (or undesirable) to hedge because they represent the mechanism by which the firm earns economic profits.References[1]Shyam,Sunder.Theory Accounting and Control[J].An Innternational Theory on PublishingComPany.2005[2]Ogryezak,W,Ruszeznski,A. Rom Stomchastic Dominance to Mean-Risk Models:Semide-Viations as Risk Measures[J].European Journal of Operational Research.[3] Borowski, D.M., and P.J. Elmer. An Expert System Approach to Financial Analysis: the Case of S&L Bankruptcy [J].Financial Management, Autumn.2004;[4] Casey, C.and N. Bartczak. Using Operating Cash Flow Data to Predict Financial Distress: Some Extensions[J]. Journal of Accounting Research,Spring.2005;[5] John M.Mulvey,HafizeGErkan.Applying CVaR for decentralized risk management of financialcompanies[J].Journal of Banking&Finanee.2006;[6] Altman. Credit Rating:Methodologies,Rationale and DefaultRisk[M](RiskBooks,London.译文:财务风险的重要性引言2008年的金融危机对金融杠杆的作用产生重大影响。
最优资本结构对经济及其它价值的作用外文翻译
本科毕业论文（设计）外文翻译原文：Optimal Capital StructureReflections on Economic and Other ValuesOver the last few decades studies have been produced on the effect of other stake holders’ interests on capital structure. Well-known examples are the interests of customers who receive product or service guarantees from the company. Another area that has received considerable attention is the relation between managerial incentives and capital structure (Ibid.). Furthermore, the issue of corporate control 1 and, related, the issue of corporate governance , receive a lion’s part of the more recent academic attention for capital structure decisions.From all these studies, one thing is clear: The capital structure decision (or rather ,the management of the capital structure over time) involves more issues than the maximization of the firm’s market value alone. In this paper, we give an overview of the different objectives and considerations that have been proposed in the literature. We make a distinction between two bro adly defined situations. The first is the traditional case of the firm that strives for the maximization of the value of the shares for the current shareholders. Whenever other considerations than value maximization enter capital structure decisions, these considerations have to be instrumental to the goal of value maximization. The second case concerns the firm that explicitly chooses for more objectives than value maximization alone. This may be because the shareholders adopt a multiple stakeholders approach or because of a different ownership structure than the usual corporate structure dominating finance literature. An example of the latter is the cooperation, a legal entity which can be found, in among others, many European countries. For a discussion on why firms are facingmultiple goals, we refer to Hallerbach and Spronk 。
外文翻译--资本结构影响因素的分析研究
中文3160字1 外文翻译原文Capital structure influencing factor analysis research Material Source:Theory of Optimal Capital StructureAuthor : R. BareaSince the Modigliani and Miller (1958) since the academic structure of the capital a large number of theoretical and empirical research, trying to identify the potential impact of capital structure choice factors. A lot of literature suggests that the choice of capital structure by the asset structure, firm size, non-debt tax shields, growth, volatility, product uniqueness, profitability and other firm characteristics factors. In addition, the choice of capital structure is also affected by industry characteristics, macroeconomic and institutional environment factors. Harris and Raviv (1991) from the experience of many U.S. companies to sum up: "leverage ratio of fixed assets, non-debt tax shields, growth and company size increases, with the volatility, advertising costs, bankruptcy the possibility of profitability and product uniqueness increases less. "Chinese listed companies due to the particularity of the system, what factors determine the choice of capital structure? Characteristics of institutional factors influenced how the company capital structure choice? Experiences and things like that to be the model and empirical test. In recent years, researchers began to affect the capital structure of listed companies in an empirical study of factors, such as Lu Zhengfei, and Xin Yu (1998), Lishan Min and Su Yun (1999), Xiaozuo Ping and Wu Shinong (2002), and achieved certain results, However, most studies are using a simple regression technique factors on capital structure for empirical analysis. Titman and Wessels (1988) pointed out the shortcomings of this approach: First, there is no wish to measure the sole representative of the property; Second, it is difficult to find and other relevant property is not related to the measurement of a particular property; third, As can be observed variable is not perfectly representative of its properties should be measured, they are used in the regression analysis will lead to errors in variable problem; fourth, the agent variables and measurement error 2 may be explained by variables related to measurement error will produce false (Spurious) related. In this paper, two-stage multiple procedures, application of factor analysis-based model to reduce measurement error, to expand the capital structure of Chinese listed companies Empirical Study.Capital StructureTo build the empirical model, the author according to the capital structure theory and relevant empirical research on factors affecting capital structure analysis, and gives a proxy variable to capture these factors.I, the asset structure Agency theory, balance theory and the theory of asymmetric information are considered assets for capital structure choice. According to agency theory, high-leverage the company's shareholders tend to sub-optimal investment (Jensen and Meckling, 1976; Myers, 1977). The assets of the company secured an opportunity to limit such behavior. Therefore, the value of assets and leverage are related to security. Another problem comes from a proxy service managers tend to consumption. Assets can be secured with fewer companies more vulnerable to such agency costs, because these companies on the capital expenditure monitoring more difficult (Grossman and Hart, 1982). Companies can increase the level of debt as a monitoring tool to mitigate this problem. Therefore, security assets and leverage can be negative. Theory from the balance with debt secured creditors to reduce the potential loss of the debtor's insolvency and, therefore, limit the amount of shareholder wealth, occupation of the debtor. Meanwhile, in bankruptcy the value of tangible assets higher than the value of intangible assets. Therefore, the value of assets and leverage are related to security. Under asymmetric information theory, tangible assets, more businesses will face less information asymmetry, therefore, should issue equity rather than debt. And the existence of asymmetric information, to the sale of secured debt had a negative because it reduces information premium. For asset structure, we use stock / total assets (INV) and fixed assets / total assets (FIX) two proxy variables.II, firm size Many studies suggest that large companies tend to diversify, with more stable cash flow, so low probability of bankruptcy. Warner (1997), Angclua and Meconnel (1982) study found that direct costs of financial distress and negatively related to firm size. Fama and Jensen (1983) that large corporations to smaller companies tend to provide more information on lenders. Therefore, less monitoring costs of large 3 companies, large companies than small companies with high borrowing capacity. Therefore, firm size should be positively correlated with leverage. And Rajan and Zingales (1995) that the large companies than small companies tend to provide more information to the public, may be related to internal investment company size and level of external investment in human negative correlation of asymmetric information. Under asymmetric information theory, large companies should be inclined to equity financing and therefore havelower leverage. The size of the company, we use the natural logarithm of total assets (LN (TA)) and the main business income of the natural logarithm (LN (S)) of two proxy variables.III, the tax That the use of tax-based model of the main benefits of debt financing is tax credits. According to tax-based theory, companies with higher marginal tax rates should use more debt to get the tax shield benefits. Therefore, the effective marginal tax rates should be positively correlated with leverage. Unable to obtain relevant data to calculate the marginal tax rate, we use the average tax rate (TAX) to analyze the tax impact of capital structure choice.IV, non-debt tax shield DeAngelo and Masulis (1980) that non-debt tax shield can be used as an alternative to debt financing, tax benefits, the same as in other cases, the non-debt tax shields have more companies should use less debt. Barton et al (1989), Prowse (1990), Wald (1999), Kim and Sorensen (1986) research shows that non-debt tax shields and leverage negative. In this paper, depreciation / total assets as non-debt tax shield (DEP) of the proxy variables.V. Growth According to agency theory, equity-controlled companies tend to sub-optimal investment will be deprived of their wealth came from the hands of creditors. For high growth companies, because of its future investment opportunities in the choice of greater flexibility, these companies may be more serious agency problems. Myers (1977) that high growth companies lower the future investment in growth companies have more options. If the high-growth companies need external equity financing options to implement in the future, then the company has a large debt may give up this opportunity, because such investment will transfer wealth from shareholders to creditors of the body, which produces the problem of insufficient investment. Therefore, growth should be negatively correlated with leverage. For growth, this growth rate with total assets (GRTA) and the equity value-added rate (GREQ) two 4 proxy variables.VI, volatility Regular payment of debt obligations involved, the highly leveraged company is more vulnerable to financial distress costs. Finance theory suggests that the risk of the company or bankrupt companies should not have a high probability of higher leverage. Therefore, the main business income volatility or commercial risk as the possibility of occurrence of financial distress proxy variables, which should be negatively correlated with leverage. Bradley et al (1984), Titman and Wesssels (1988), Wald (1999) and Booth et al (2001) and other studies have shown that volatility negatively correlated with leverage. In this paper, the main business of the standards slip ((VOL) as a proxy for volatility.VII ability to generate internal resources Trade-off theory is that ability to generate internal resources to leverage a positive correlation, because a strong ability to generate internal resources, companies choose higher leverage to get more debt tax shield. Jensen (1986) pointed out that instead of borrowing to pay dividends to ensure that the management discipline empire method. The benefits of debt "can improve the efficiency of managers and their organizations", which act as a "control effect" role. Therefore, the company has a large free cash flow should have higher debt to limit management's discretion. According to the Theory of Optimal Financing (Pecking order theory), because the existence of asymmetric information, the company follows the financial pecking order model: companies prefer internal resources, internal resources have been exhausted if the company was to issue debt, and finally the issue of equity. Therefore, the ability to generate internal resources, negatively correlated with leverage. The ability to generate internal resources, this paper, the cash rate of sale (NOCFS) and total assets of cash recovery rate (NOCFA) two proxy variables, but to test the Jensen (1986) free cash flow hypothesis proposed in this paper with a cash rate of sales / total Asset growth rate (FCFS) and total assets of cash recovery rate / total assets growth rate (FCFA), as free cash flow (Note: free cash flow is difficult to quantify, can not be obtained directly from the financial data, must be used in other empirical research cash flow concept, and in line with the growth of the company (such as Tobin'Q, growth rate of total assets), investment opportunities, free cash flow and other indicators in order to explain the problem.) proxy variables.VIII, product uniqueness 5 From the stakeholder theory of capital structure and product / factor market theory perspective, the company has a unique product should have less leverage. Titman and Wessels (1988) that, in liquidation, the production of unique or specialized products company, its customers, suppliers, workers will suffer from higher costs. Their workers and suppliers may have the skills and capital, job characteristics, and the customer service more difficult to find a replacement phase. From the agency cost perspective, the expected cost of employees looking for work products and services depends on whether there is unique. Employees working on the implementation of mass-specific work with respect to employees engaged in the former expected to find lower cost. Therefore, when other conditions being equal, and human-related costs for the agency to provide specialized products and services relative to the companies higher. Due to higher leverage will have higher agency costs and bankruptcy costs, sothe uniqueness of products and services will affect the degree of capital structure choice. These companies promote their unique products will suffer more sales costs and advertising costs. In this paper, operating expenses / Income from principal operations (SEXP) as a proxy for product uniqueness.IX liquidity Current ratio of capital structure choice is mixed. On the one hand, high flow rate paid by the company short-term debt due ability. Therefore, liquidity should be positively correlated with leverage. On the other hand, companies with more liquid assets may use these assets to finance its investments. Therefore, the flow of state assets would negatively affect leverage. And, as Prowse (1990) points out, can be used to indicate the liquidity of the assets to creditors, the interests of shareholders to manipulate the expense of the extent of these assets. In this paper, the current ratio (CR) and the quick ratio (QR) as a proxy for liquidity.Ten, industry characteristics The asset risk, asset type, and the demand for external funds vary by industry, the average leverage will vary with the industry. Industry characteristics and capital structure characteristics of the fact that the leverage within the same industry in different sectors of the lever more than the similar, leverage levels to remain relatively the same industry (Bowen et al, 1982; Bradley et al 1984). Bradley et al (1984) studies have shown that regulated industries (telecommunications, electronics, utilities and aviation industry) with higher leverage. This article uses the industry dummy variables to control the impact of industry factors on the lever.2、译文资本结构影响因素的分析研究资料来源: 最优资本结构原理作者: 巴里亚自Modigliani 和Miller(1958) 以来，学术界对资本结构进行了大量的理论和实证研究，试图辨别影响资本结构选择的潜在因素。
资本结构、股权结构与公司绩效外文翻译
资本结构、股权结构与公司绩效外文翻译中文2825字1868单词外文文献：Capital structure, equity ownership and firm performanceDimitris Margaritis, Maria Psillaki 1Abstract：This paper investigates the relationship between capital structure, ownership structure and firm performance using a sample of French manufacturing firms. We employ non-parametric data envelopment analysis (DEA) methods to empirically construct the industry’s ‘best practice’frontier and measure firm efficiency as the distance from that frontier. Using these performance measures we examine if more efficient firms choose more or less debt in their capital structure. We summarize the contrasting effects of efficiency on capital structure in terms of two competing hypotheses: the efficiency-risk and franchise value hypotheses. Using quantile regressions we test the effect of efficiency on leverage and thus the empirical validity of the two competing hypotheses across different capital structure choices. We also test the direct relationship from leverage to efficiency stipulated by the Jensen and Meckling (1976) agency cost model. Throughout this analysis we consider the role of ownership structure and type on capital structure and firm performance.Firm performance, capital structure and ownershipConflicts of interest between owners-managers and outside shareholders as well as those between controlling and minority shareholders lie at the heart of the corporate governance literature (Berle and Means, 1932; Jensen and Meckling, 1976;Shleifer and Vishny, 1986). While there is a relatively large literature on the effects of ownership on firm performance (see for example, Morck et al., 1988; McConnell and Servaes, 1990; Himmelberg et al., 1999), the relationship between ownership structure and capital structure remains largely unexplored. On the other hand, a voluminous literature is devoted to capital structure and its effects on corporate performance –see the surveys by Harris and Raviv (1991) and Myers (2001). An emerging consensus that comes out of the corporate governance literature (see Mahrt-Smith, 2005) is that the interactions between capital structure and ownership structure impact on firm values. Yet theoretical arguments alone cannot unequivocally predict these relationships (see Morck et al., 1988) and the empirical evidence that we have often appears to be contradictory. In part these conflicting results arise from difficulties empirical researchers face in obtaining direct measures of the magnitude of agency costs that are not confounded by factors that are beyond the control of management (Berger and Bonaccorsi di Patti, 2006). In the remainder of this section we briefly review the literature in this area focusing on the main hypotheses of interest for this study.Firm performance and capital structureThe agency cost theory is premised on the idea that the interests of the company’s managers and its shareholders are not perfectly aligned. In their seminal paper Jensen and Meckling (1976) emphasized the importance of the agency costs of equity arising from the separation of ownership and control of firms whereby managers tend to maximize their own utility rather than the value of the firm. These conflicts may occur in situations where managers have incentives to take1来源：Journal of Banking & Finance , 2010 (34) : 621–632，本文翻译的是第二部分excessive risks as part of risk shifting investment strategies. This leads us to Jensen’s (1986) “free cash flow theory”where as stated by Jensen (1986, p. 323) “the pro blem is how to motivate managers to disgorge the cash rather than investing it below the cost of capital or wasting it on organizational inefficiencies.”Thus high debt ratios may be used as a disciplinary device to reduce managerial cash flow waste through the threat of liquidation (Grossman and Hart, 1982) or through pressure to generate cash flows to service debt (Jensen, 1986). In these situations, debt will have a positive effect on the value of the firm.Agency costs can also exist from conflicts between debt and equity investors. These conflicts arise when there is a risk of default. The risk of default may create what Myers (1977) referred to as an“underinvestment”or “debt overhang”problem. In this case, debt will have a negative effect on the value of the firm. Building on Myers (1977) and Jensen (1986), Stulz (1990) develops a model in which debt financing is shown to mitigate overinvestment problems but aggravate the underinvestment problem. The model predicts that debt can have both a positive and a negative effect on firm performance and presumably both effects are present in all firms. We allow for the presence of both effects in the empirical specification of the agency cost model. However we expect the impact of leverage to be negative overall. We summarize this in terms of our first testable hypothesis. According to the agency cost hypothesis (H1) higher leverage is expected to lower agency costs, reduce inefficiency and thereby lead to an improvement in firm’s performance.Reverse causality from firm performance to capital structure But firm performance may also affect the choice of capital structure. Berger and Bonaccorsi di Patti (2006) stipulate that more efficient firms are more likely to earn a higher return for a given capital structure, and that higher returns can act as a buffer against portfolio risk so that more efficient firms are in a better position to substitute equity for debt in their capital structure. Hence under the efficiency-risk hypothesis (H2), more efficient firms choose higher leverage ratios because higher efficiency is expected to lower the costs of bankruptcy and financial distress. In essence, the efficiency-risk hypothesis is a spin-off of the trade-off theory of capital structure whereby differences in efficiency, all else equal, enable firms to fine tune their optimal capital structure.It is also possible that firms which expect to sustain high efficiency rates into the future will choose lower debt to equity ratios in an attempt to guard the economic rents or franchise value generated by these efficiencies from the threat of liquidation (see Demsetz, 1973; Berger and Bonaccorsi di Patti, 2006). Thus in addition to a equity for debt substitution effect, the relationship between efficiency and capital structure may also be characterized by the presence of an income effect. Under the franchise-value hypothesis (H2a) more efficient firms tend to hold extra equity capital and therefore, all else equal, choose lower leverage ratios to protect their future income or franchise value.Thus the efficiency-risk hypothesis (H2) and the franchise-value hypothesis (H2a) yield opposite predictions regarding the likely effects of firm efficiency on the choice of capital structure. Although we cannot identify the separate substitution andincome effects our empirical analysis is able to determine which effect dominates the other across the spectrum of different capital structure choices.Ownership structure and the agency costs of debt and equity.The relationship between ownership structure and firm performance dates back to Berle andMeans (1932) who argued that widely held corporations in the US, in which ownership of capital is dispersed among small shareholders and control is concentrated in the hands of insiders tend to underperform. Following from this, Jensen and Meckling (1976) develop more formally the classical owner-manager agency problem. They advocate that managerial share-ownership may reduce managerial incentives to consume perquisites, expropriate shareholders’wealth or to engage in other sub-optimal activities and thus helps in aligning the interests of managers and shareholders which in turn lowers agency costs. Along similar lines, Shleifer and Vishny (1986) show that large external equity holders can mitigate agency conflicts because of their strong incentives to monitor and discipline management.In contrast Demsetz (1983) and Fama and Jensen (1983) point out that a rise in insider share-ownership stakes may also be associated with adverse ‘entrenchment’effects tha t can lead to an increase in managerial opportunism at the expense of outside investors. Whether firm value would be maximized in the presence of large controlling shareholders depends on the entrenchment effect (Claessens et al., 2002; Villalonga and Amit, 2006; Dow and McGuire, 2009). Several studies document either a direct (e.g., Shleifer and Vishny, 1986; Claessens et al., 2002; Hu and Zhou, 2008) or a non-monotonic (e.g., Morck et al., 1988;McConnell and Servaes, 1995; Davies et al., 2005) relationship between ownership structure and firm performance while others (e.g., Demsetz and Lehn, 1985; Himmelberg et al., 1999; Demsetz and Villalonga, 2001) find no relation between ownership concentration and firm performance.Family firms are a special class of large shareholders with unique incentive structures. For example, concerns over family and business reputation and firm survival would tend to mitigate the agency costs of outside debt and outside equity (Demsetz and Lehn, 1985; Anderson et al., 2003) although controlling family shareholders may still expropriate minority shareholders (Claessens et al., 2002; Villalonga and Amit, 2006). Several studies (e.g., Anderson and Reeb, 2003a; Villalonga and Amit, 2006; Maury, 2006; King and Santor, 2008) report that family firms especially those with large personal owners tend to outperform non-family firms. In addition, the empirical findings of Maury (2006) suggest that large controlling family ownership in Western Europe appears to benefit rather than harm minority shareholders. Thus we expect that the net effect of family ownership on firm performance will be positive.Large institutional investors may not, on the other hand, have incentives to monitor management (Villalonga and Amit, 2006) and they may even coerce with management (McConnell and Servaes, 1990; Claessens et al., 2002; Cornett et al., 2007). In addition, Shleifer and Vishny (1986) and La Porta et al. (2002) argue that equity concentration is more likely to have a positive effect on firm performance in situations where control by large equity holders may act as a substitute for legal protection in countries with weak investor protection and less developed capital markets where they also classify Continental Europe.We summarize the contrasting ownership effects of incentive alignment and entrenchment on firm performance in terms of two competing hypotheses. Under the ‘convergence-of-interest hypothesis’(H3) more concentrated ownership should have a positive effect on firm performance. And under the ownership entrenchment hypothesis (H3a) the effect of ownership concentration on firm performance is expected to be negative.The presence of ownership entrenchment and incentive alignment effects also has implications for the firm’s capital structure choice. We assess these effects empirically. As external blockholders have strong incentives to reduce managerial opportunism they may prefer to use debtas a governance mechanism to control management’s consumption of perquisites (Grossman and Hart, 1982). In that case firms with large external blockholdings are likely to have higher debt ratios at least up to the point where the risk of bankruptcy may induce them to lower debt. Family firms may also use higher debt levels to the extent that they are perceived to be less risky by debtholders (Anderson et al., 2003). On the other hand the relation between leverage and insider share-ownership may be negative in situations where managerial blockholders choose lower debt to protect their non-diversifiable human capital and wealth invested in the firm (Friend and Lang, 1988). Brailsford et al. (2002) report a non-linear relationship between managerial share-ownership and leverage. At low levels of managerial ownership, agency conflicts necessitate the use of more debt but as managers become entrenched at high levels of managerial ownership they seek to reduce their risks and they use less debt. Anderson and Reeb (2003) find that insider ownership by managers or families has no effect on leveragewhile King and Santor (2008) report that both family firms and firms controlled by financial institutions carry more debt in their capital structure.外文翻译：资本结构、股权结构与公司绩效摘要：本文通过对法国制造业公司的抽样调查，研究资本结构、所有权结构和公司绩效的关系。
资本结构外文文献翻译
How Important is Financial Risk?IntroductionThe financial crisis of 2008 has brought significant attention to the effects of financial leverage. There is no doubt that the high levels of debt financing by financial institutions and households significantly contributed to the crisis. Indeed, evidence indicates that excessive leverage orchestrated by major global banks (e.g., through the mortgage lending and collateralized debt obligations) and the so-called “shadow banking system” may be the underlying cau se of the recent economic and financial dislocation. Less obvious is the role of financial leverage among nonfinancial firms. To date, problems in the U.S. non-financial sector have been minor compared to the distress in the financial sector despite the seizing of capital markets during the crisis. For example, non-financial bankruptcies have been limited given that the economic decline is the largest since the great depression of the 1930s. In fact, bankruptcy filings of non-financial firms have occurred mostly in U.S. industries (e.g., automotive manufacturing, newspapers, and real estate) that faced fundamental economic pressures prior to the financial crisis. This surprising fact begs the question, “How important is financial risk for non-financial firms?” At the heart of this issue is the uncertainty about the determinants of total firm risk as well as components of firm risk.StudyRecent academic research in both asset pricing and corporate finance has rekindled an interest in analyzing equity price risk. A current strand of the asset pricing literature examines the finding of Campbell et al. (2001) that firm-specific (idiosyncratic) risk has tended to increase over the last 40 years. Other work suggests that idiosyncratic risk may be a priced risk factor (see Goyal and Santa-Clara, 2003, among others). Also related to these studies is work by Pástor and Veronesi (2003) showing how investor uncertainty about firm profitability is an important determinant of idiosyncratic risk and firm value. Other research has examined the role of equity volatility in bond pricing (e.g., Dichev, 1998, Campbell, Hilscher, and Szilagyi, 2008).However, much of the empirical work examining equity price risk takes the risk of assets as given or tries to explain the trend in idiosyncratic risk. In contrast, thispaper takes a different tack in the investigation of equity price risk. First, we seek to understand the determinants of equity price risk at the firm level by considering total risk as the product of risks inherent in the firms operations (i.e., economic or business risks) and risks associated with financing the firms operations (i.e., financial risks). Second, we attempt to assess the relative importance of economic and financial risks and the implications for financial policy.Early research by Modigliani and Miller (1958) suggests that financial policy may be largely irrelevant for firm value because investors can replicate many financial decisions by the firm at a low cost (i.e., via homemade leverage) and well-functioning capital markets should be able to distinguish between financial and economic distress. Nonetheless, financial policies, such as adding debt to the capital structure, can magnify the risk of equity. In contrast, recent research on corporate risk management suggests that firms may also be able to reduce risks and increase value with financial policies such as hedging with financial derivatives. However, this research is often motivated by substantial deadweight costs associated with financial distress or other market imperfections associated with financial leverage. Empirical research provides conflicting accounts of how costly financial distress can be for a typical publicly traded firm.We attempt to directly address the roles of economic and financial risk by examining determinants of total firm risk. In our analysis we utilize a large sample of non-financial firms in the United States. Our goal of identifying the most important determinants of equity price risk (volatility) relies on viewing financial policy as transforming asset volatility into equity volatility via financial leverage. Thus, throughout the paper, we consider financial leverage as the wedge between asset volatility and equity volatility. For example, in a static setting, debt provides financial leverage that magnifies operating cash flow volatility. Because financial policy is determined by owners (and managers), we are careful to examine the effects of firms’ asset and operating characteristics on financial policy. Specifically, we examine a variety of characteristics suggested by previous research and, as clearly as possible, distinguish between those associated with the operations of the company (i.e. factors determining economic risk) and those associated with financing the firm (i.e. factors determining financial risk). We then allow economic risk to be a determinant of financial policy in the structural framework of Leland and Toft (1996), or alternatively,in a reduced form model of financial leverage. An advantage of the structural model approach is that we are able to account for both the possibility of financial and operating implications of some factors (e.g., dividends), as well as the endogenous nature of the bankruptcy decision and financial policy in general.Our proxy for firm risk is the volatility of common stock returns derived from calculating the standard deviation of daily equity returns. Our proxies for economic risk are designed to capture the essential characteristics of the firms’ operations and assets that determine the cash flow generating process for the firm. For example, firm size and age provide measures of line of- business maturity; tangible assets (plant, property, and equipment) serve as a proxy for the ‘hardness’ of a firm’s assets; capital expenditures measure capital intensity as well as growth potential. Operating profitability and operating profit volatility serve as measures of the timeliness and riskiness of cash flows. To understand how financial factors affect firm risk, we examine total debt, debt maturity, dividend payouts, and holdings of cash and short-term investments.The primary result of our analysis is surprising: factors determining economic risk for a typical company explain the vast majority of the variation in equity volatility. Correspondingly, measures of implied financial leverage are much lower than observed debt ratios. Specifically, in our sample covering 1964-2008 average actual net financial (market) leverage is about 1.50 compared to our estimates of between 1.03 and 1.11 (depending on model specification and estimation technique). This suggests that firms may undertake other financial policies to manage financial risk and thus lower effective leverage to nearly negligible levels. These policies might include dynamically adjusting financial variables such as debt levels, debt maturity, or cash holdings (see, for example, Acharya, Almeida, and Campello, 2007). In addition, many firms also utilize explicit financial risk management techniques such as the use of financial derivatives, contractual arrangements with investors (e.g. lines of credit, call provisions in debt contracts, or contingencies in supplier contracts), special purpose vehicles (SPVs), or other alternative risk transfer techniques.The effects of our economic risk factors on equity volatility are generally highly statistically significant, with predicted signs. In addition, the magnitudes of the effects are substantial. We find that volatility of equity decreases with the size and age of the firm. This is intuitive since large and mature firms typically have more stable lines ofbusiness, which should be reflected in the volatility of equity returns. Equity volatility tends to decrease with capital expenditures though the effect is weak. Consistent with the predictions of Pástor and Veronesi (2003), we find that firms with higher profitability and lower profit volatility have lower equity volatility. This suggests that companies with higher and more stable operating cash flows are less likely to go bankrupt, and therefore are potentially less risky. Among economic risk variables, the effects of firm size, profit volatility, and dividend policy on equity volatility stand out. Unlike some previous studies, our careful treatment of the endogeneity of financial policy confirms that leverage increases total firm risk. Otherwise, financial risk factors are not reliably related to total risk.Given the large literature on financial policy, it is no surprise that financial variables are,at least in part, determined by the economic risks firms take. However, some of the specific findings are unexpected. For example, in a simple model of capital structure, dividend payouts should increase financial leverage since they represent an outflow of cash from the firm (i.e., increase net debt). We find that dividends are associated with lower risk. This suggests that paying dividends is not as much a product of financial policy as a characteristic of a firm’s operations(e.g., a mature company with limited growth opportunities). We also estimate how sensitivities to different risk factors have changed over time. Our results indicate that most relations are fairly stable. One exception is firm age which prior to 1983 tends to be positively related to risk and has since been consistently negatively related to risk. This is related to findings by Brown and Kapadia (2007) that recent trends in idiosyncratic risk are related to stock listings by younger and riskier firms.Perhaps the most interesting result from our analysis is that our measures of implied financial leverage have declined over the last 30 years at the same time that measures of equity price risk (such as idiosyncratic risk) appear to have been increasing. In fact, measures of implied financial leverage from our structural model settle near 1.0 (i.e., no leverage) by the end of our sample. There are several possible reasons for this. First, total debt ratios for non-financial firms have declined steadily over the last 30 years, so our measure of implied leverage should also decline. Second, firms have significantly increased cash holdings, so measures of net debt (debt minus cash and short-term investments) have also declined. Third, the composition of publicly traded firms has changed with more risky (especially technology-oriented)firms becoming publicly listed. These firms tend to have less debt in their capital structure. Fourth, as mentioned above, firms can undertake a variety of financial risk management activities. To the extent that these activities have increased over the last few decades, firms will have become less exposed to financial risk factors.We conduct some additional tests to provide a reality check of our results. First, we repeat our analysis with a reduced form model that imposes minimum structural rigidity on our estimation and find very similar results. This indicates that our results are unlikely to be driven by model misspecification. We also compare our results with trends in aggregate debt levels for all U.S. non-financial firms and find evidence consistent with our conclusions. Finally, we look at characteristics of publicly traded non-financial firms that file for bankruptcy around the last three recessions and find evidence suggesting that these firms are increasingly being affected by economic distress as opposed to financial distress.ConclusionIn short, our results suggest that, as a practical matter, residual financial risk is now relatively unimportant for the typical U.S. firm. This raises questions about the level of expected financial distress costs since the probability of financial distress is likely to be lower than commonly thought for most companies. For example, our results suggest that estimates of the level of systematic risk in bond pricing may be biased if they do not take into account the trend in implied financial leverage (e.g., Dichev, 1998). Our results also bring into question the appropriateness of financial models used to estimate default probabilities, since financial policies that may be difficult to observe appear to significantly reduce risk. Lastly, our results imply that the fundamental risks born by shareholders are primarily related to underlying economic risks which should lead to a relatively efficient allocation of capital.Some readers may be tempted to interpret our results as indicating that financial risk does not matter. This is not the proper interpretation. Instead, our results suggest that firms are able to manage financial risk so that the resulting exposure to shareholders is low compared to economic risks. Of course, financial risk is important to firms that choose to take on such risks either through high debt levels or a lack of risk management. In contrast, our study suggests that the typical non-financial firm chooses not to take these risks. In short, gross financial risk may be important, but firms can manage it. This contrasts with fundamental economic and business risks thatare more difficult (or undesirable) to hedge because they represent the mechanism by which the firm earns economic profits.References[1]Shyam,Sunder.Theory Accounting and Control[J].An Innternational Theory on PublishingComPany.2005[2]Ogryezak,W,Ruszeznski,A. Rom Stomchastic Dominance to Mean-Risk Models:Semide-Viations as Risk Measures[J].European Journal of Operational Research.[3] Borowski, D.M., and P.J. Elmer. An Expert System Approach to Financial Analysis: the Case of S&L Bankruptcy [J].Financial Management, Autumn.2004;[4] Casey, C.and N. Bartczak. Using Operating Cash Flow Data to Predict Financial Distress: Some Extensions[J]. Journal of Accounting Research,Spring.2005;[5] John M.Mulvey,HafizeGErkan.Applying CVaR for decentralized risk management of financialcompanies[J].Journal of Banking&Finanee.2006;[6] Altman. Credit Rating:Methodologies,Rationale and Default Risk[M]．Risk Books,London.译文：财务风险的重要性引言2008年的金融危机对金融杠杆的作用产生重大影响。
世界各地的资本结构公司和国家因素在其中的影响外文与译文
外文文献翻译译文原文：Capital Structure around the World: The Roles of FirmandCountry-Specific DeterminantsWe analyze the importance of firm-specific and country-specific factors in the leverage choice of firms from 42 countries around the world. Our analysis yields two new results. First, we find that firm-specific determinants of leverage differ across countries, while prior studies implicitly assume equal impact of firm-specific factors. Second, although we concur with the conventional direct impact of country-specific factors on the capital structure of firms, we show that there is an indirect impact because country-specific factors also influence the roles of firm-specific determinants of leverage.Prior research (e.g. Demirgüç-Kuntand Maksimovic, 1999; Booth, Demirgüç-Kunt andMaksimovic, 2001; Claessens, Djankov and Nenova, 2001; Bancel and Mittoo, 2004) finds thata firm’s capital structure is not only influenced by firm-specific factors but also by country specificfactors. In this study, we demonstrate that country-specific factors can affect corporateleverage in two ways. On the one hand, these factors can influence leverage directly. Forexample, a more developed bond market facilitating issue and trading of public bonds may leadto the use of higher leverage in a country, while a developed stock market has theoppositeeffect. On the other hand, we show that country-specific factors can also influence corporateleverage indirectly through their impact on firm-specific factors’ roles. For example, althoughthe dev eloped bond market of a country stimulates the use of debt, the role of asset tangibility ascollateral in borrowing will be rather limited for firms in the same country. In other words,country-characteristics may explain why in one country a firm’s tangibi lity affects leverage, butnot in another country. Previous studies have not systematically investigated these indirecteffects.International studies comparing differences in the capital structure between countriesstarted to appear only during the last decade. An early investigation of seven advancedindustrialized countries is performed by Rajan and Zingales (1995). They argue that althoughcommon firm-specific factors significantly influence the capital structure of firms acrosscountries, several country-specific factors also play an important role. Demirgüç-Kunt andMaksimovic (1999) compare capital structure of firms from 19 developed countries and 11developing countries. They find that institutional differences between developed and developingcountries explain a large portion of the variation in the use of long-term debt. They also observethat some institutional factors in developing countries influence the leverage of large and smallfirms differently. Several recent studies on the field have indicated that even amongdevelopedeconomies like the U.S. and European countries, the financing policies and managers’ behaviorare influenced by the institutional environment and international operations (see, for example, Graham and Harvey, 2001; Bancel and Mittoo, 2004; and Brounen, De Jong and Koedijk,2006).The literature specifically discusses only the direct impact of country characteristics onleverage. In an analysis of ten developing countries, Booth et al. (2001) find that capitalstructure decisions of firms in these countries are affected by the same firm-specific factors as indeveloped countries. However, they find that there are differences in the way leverage isaffected by country-specific factors such as GDP growth and capital market development. Theyconclude that more research needs to be done to understand the impact of institutional factors onfirms’ capital structure choices. The importance of country-specific factors in determining crosscountrycapital structure choice of firms is also acknowledged by Fan et al. (2006) who analyzea larger sample of 39 countries. They find a significant impact of a few additional country-specificfactors such as the degree of development in the banking sector, and equity and bondmarkets. In another study of 30 OECD countries, Song and Philippatos (2004) report that mostcross-sectional variation in international capital structure is caused by the heterogeneity of firm-,industry-, and country-specific determinants. However, they do notfind evidence to support theimportance of cross-country legal institutional differences in affecting corporate leverage.Giannetti (2003) argues that the failure to find a significant impact of country-specific variablesmay be due to the bias induced in many studies by including only large listed companies. Sheanalyzes a large sample of unlisted firms from eight European countries and finds a significantinfluence on the leverage of individual firms of a few institutional variables such as creditorprotection, stock market development and legal enforcement. Similarly, Hall et al. (2004) analyze a large sample of unlisted firms from eight European countries. They observe crosscountryvariation in the determinants of capital structure and suggest that this variation could bedue to different country-specific variables.A remarkable feature of existing studies on international capital structure is the implicitassumption that the impact of firm-specific factors on leverage is equal across countries (see forexample Booth et al., 2001; Giannetti, 2003; Song and Philippatos, 2004; and Fan et al., 2006). By reporting the estimated coefficients for firm-specificdeterminants of leverage per country, these papers, on the one hand, acknowledge that theimpact of firm-level determinants does differ in terms of signs, magnitudes and significancelevels. On the other hand, in the analysis of country-specific determinants of corporateleverage,these papers also make use of country dummies in pooled firm-year regressions, thus forcing thefirm-specific coefficients to have the same value. With an extremely large number of firm-yearobservations, it is more likely for this procedure to produce statistically significant results formany country-specific variables. But, utilizing an alternative regression framework where asingle average capital structure for each country is used as an observation, one hardly findsstrong evidence on this issue. As an additional contribution of our paper, we show the invalidity of this implicit assumption. Our analysis without imposing such restriction thus provides a more reliable analysis on theimportance of country-specific variables.The study encompasses a large number of countries (42 in total) from every continent forthe period 1997-2001. We construct a database of nearly 12,000 firms (about 60,000 firm-yearobservations). All types of firms –large and small – are included as long as a reasonable amountof data is available. We analyze the standard firm-specific determinants of leverage like firmsize, asset tangibility, profitability, firm risk and growth opportunities. Besides, we incorporate alarge number of country-specific variables in our analysis, including legal enforcement,shareholder/creditor right protection, market/bank-based financial system, stock/bond marketdevelopment and growth rate in a country’s gross domestic product (GDP).Firm-specific and country-specific determinants are the two major types of variables thatwe take into account when analyzing the impacts on firms’ leverage choice.The firms in our sample cover 42 countries that are equally divided between developedand developing countries. Data for leverage and firm-specific variables are collected fromCOMPUSTAT Global database. We exclude financial firms and utilities. Data on country-specificvariables are collected from a variety of sources, mainly World Development Indicatorsfiles and Financial Structure Database of the World Bank. Few country-specific variables aretaken from previous studies including La Porta et al. (1998), Claessens and Klapper (2002) andBerkowitz et al. (2003).Our sample period covers the years 1997-2001. The selection of a time-period involves atrade-off between the number of countries that can be included in the study and the availabilityof enough firm-specific data. Whenever needed, we resort to some other sources to collect anymissing data. It is still impossible to obtain data for each and every variable from all 42countries during this time period. The final sample consists of 59,225 observations on 11,845firms. Even though we aim to keep the number of countries high enough and also maintain a reasonable number of firms, our dataset has unavoidably a limited number of firms in a fewcountries.Analyzing the direct impact of country-specific factors on leverage, the evidencesuggests that creditor right protection, bond market development,and GDP growth rate have asignificant influence on corporate capital structure. In measuring the impact indirectly, we findevidence for the importance of legal enforcement, creditor/shareholder right protection, andmacro-economic measures such as capital formation and GDP growth rate. It implies that incountries with a better legal environment and more stable and healthier economic conditions, firms are not only likely to take more debt, but also the effects of firm-level determinants of leverageare also reinforced. Overall, the evidence provided here highlights the importance of country-specificfactors in corporate capital structure decisions. Our conclusion is that country-specificfactors do matter in determining and affecting the leverage choice around the world, and it isuseful to take into account these factors in the analysis of a country’s capital structure. If thelimitations of data, especially the number of countries, can be overcome, one might find evenmore significant results with respect to the impact of country-specificfactors.We first make a detailed comparative analysis of the impact of various firm-specificfactors. We find across a large number of countries that the impact of some factors liketangibility, firm size, risk, and profitability and growth opportunities is strong and consistent withstandard capital structure theories. Our study shows that, in terms of firm-specific determinantsof leverage, capital structure theories doexplain the corporate leverage choice in a large numberof countries. Using a model with several firm-specific explanatory variables, we find a relativelylarge explanatory power of leverage regressions in most countries. However, a few determinantsremain insignificant, and in some countries one or two coefficients are significant with anunexpected sign. Performing a simple statistical test, we reject the hypothesis that firm-specificcoefficients across countries are equal. It indicates that the often-made implicit assumption ofequal firm-level determinants of leverage across countries does not hold.In the analysis of the direct impact of country-specific factors, we observe that certainfactors like GDP growth rate, bond market development and creditor rightprotectionsignificantly explain the variation in capital structure across countries. Moreover, we findconsiderable explanatory power of country-specific variables beyond firm-specific factors. Wethen proceed to measure the indirect impact of country-specific variables. The resultsconsistently show the importance of country factors as we document significant effects of thesevia firm-specific determinants. For example, we observe that in countries with a better lawenforcement system and a more healthy economy, firms are not only likely to take more debt,but the effects of some firm-level determinants of leverage such as growth opportunities,profitability and liquidity are also reinforced. Our findings indicate that theconventionaltheories on capitalstructure developed using listed firms in the United States as a role model,work well in similar economies with developed legal environment and high level of economicdevelopment. The indirect impact analysis also indicates that firm-specific variables aresignificantly influenced by several country-specific variables but in different ways.Capital structure theories have been mostly developed and tested in the single-countrycontext. Researchers have identified several firm-specific determinants of a firm’s leverage,based on the three most accepted theoretical models of capital structure, i.e. the static trade-offtheory, the agency theory and the pecking-order theory. A large number of studies have beenconducted to date investigating to what extent these factors influence capital structures of firmsoperating within a specific country. In this paper, we examine the role of firm-specificdeterminants of corporate leverage choice around the world. We analyze a large sample of 42countries, divided equally between developed and developing countries. Our main objective isto verify the role of various country-specific factors in determining corporate capital structure.We distinguish two types of effects: the direct effect on leverage and the indirect effect throughthe influence on firm-specific determinants of corporate leverage.We find that the impact of several firm-specific factors liketangibility, firm size, risk,growth and profitability on cross-country capital structure is significant and consistent with theprediction of conventional capital structure theories. On the other hand, we also observe that ineach country one or more firm-specific factors are not significantly related to leverage. Forsome countries, we find results that are inconsistent with theoretical predictions.Several studies analyzing international capital structure assume cross-country equality offirm-level determinants. We show that this assumption is unfounded. Rather, it is necessary toconduct an analysis of country-specific factors by including countries as observations and avoida specification using a pooled regression method. We conduct regressions using country-specificfactors to explain coefficients of country dummies as well as firm-specificdeterminants.Source:Abede Jong, RezaulK abir, 2007.9 “Capital Structure around the World: The Roles of FirmandCountry-Specific Determinants”. ERIM Report Series Reach in Management.September.pp.58-63.译文：世界各地的资本结构：公司和国家因素在其中的影响我们从世界42个国家中分析了公司在选择财务杠杆所需要考虑的公司特有因素和国家因素的重要性。
资本结构与企业绩效【外文翻译】
外文翻译Capital Structure and Firm Performance Material Source: Board of Governors of the Federal Reserve SystemAuthor: Allen N. BergerAgency costs represent important problems in corporate governance in both financial and nonfinancial industries. The separation of ownership and control in a professionally managed firm may result in managers exerting insufficient work effort, indulging in perquisites, choosing inputs or outputs that suit their own preferences, or otherwise failing to maximize firm value. In effect, the agency costs of outside ownership equal the lost value from professional managers maximizing their own utility, rather than the value of the firm.Theory suggests that the choice of capital structure may help mitigate these agency costs. Under the agency costs hypothesis, high leverage or a low equity/asset ratio reduces the agency costs of outside equity and increases firm value by constraining or encouraging managers to act more in the interests of shareholders. Since the seminal paper by Jensen and Meckling (1976), a vast literature on such agency-theoretic explanations of capital structure has developed (see Harris and Raviv 1991 and Myers 2001 for reviews). Greater financial leverage may affect managers and reduce agency costs through the threat of liquidation, which causes personal losses to managers of salaries, reputation, perquisites, etc. (e.g., Grossman and Hart 1982, Williams 1987), and through pressure to generate cash flow to pay interest expenses (e.g., Jensen 1986). Higher leverage can mitigate conflicts between shareholders and managers concerning the choice of investment (e.g., Myers 1977), the amount of risk to undertake (e.g., Jensen and Meckling 1976, Williams 1987), the conditions under which the firm is liquidated (e.g., Harris and Raviv 1990), and dividend policy (e.g., Stulz 1990).A testable prediction of this class of models is that increasing the leverage ratio should result in lower agency costs of outside equity and improved firm performance, all else held equal. However, when leverage becomes relatively high, further increases generate significant agency costs of outside debt – including higher expected costs of bankruptcy or financial distress – arising from conflicts between bondholders and shareholders.1 Because it is difficult to distinguish empiricallybetween the two sources of agency costs, we follow the literature and allow the relationship between total agency costs and leverage to be non-monotonic.Despite the importance of this theory, there is at best mixed empirical evidence in the extant literature (see Harris and Raviv 1991, Titman 2000, and Myers 2001 for reviews). Tests of the agency costs hypothesis typically regress measures of firm performance on the equity capital ratio or other indicator of leverage plus some control variables. At least three problems appear in the prior studies that we address in our application.First, the measures of firm performance are usually ratios fashioned from financial statements or stock market prices, such as industry-adjusted operating margins or stock market returns. These measures do not net out the effects of differences in exogenous market factors that affect firm value, but are beyond management’s control and therefore cannot reflect agency costs. Thus, the tests may be confounded by factors that are unrelated to agency costs. As well, these studies generally do not set a separate benchmark for each firm’s performance that would be realized if agency costs were minimized.We address the measurement problem by using profit efficiency as our indicator of firm performance. The link between productive efficiency and agency costs was first suggested by Stigler (1976), and profit efficiency represents a refinement of the efficiency concept developed since that time.2 Profit efficiency evaluates how close a firm is to earning the profit that a best-practice firm would earn facing the same exogenous conditions. This has the benefit of controlling for factors outside the control of management that are not part of agency costs. In contrast, comparisons of standard financial ratios, stock market returns, and similar measures typically do not control for these exogenous factors. Even when the measures used in the literature are industry adjusted, they may not account for important differences across firms within an industry –such as local market conditions – as we are able to do with profit efficiency. In addition, the performance of a best-practice firm under the same exogenous conditions is a reasonable benchmark for how the firm would be expected to perform if agency costs were minimized.Second, the prior research generally does not take into account the possibility of reverse causation from performance to capital structure. If firm performance affects the choice of capital structure, then failure to take this reverse causality into account may result in simultaneous-equations bias. That is, regressions of firmperformance on a measure of leverage may confound the effects of capital structure on performance with the effects of performance on capital structure.We address this problem by allowing for reverse causality from performance to capital structure. We discuss below two hypotheses for why firm performance may affect the choice of capital structure, the efficiency-risk hypothesis and the franchise-value hypothesis. We construct a two-equation structural model and estimate it using two-stage least squares (2SLS). An equation specifying profit efficiency as a function of the firm’s equity capital ratio and other variables is use d to test the agency costs hypothesis, and an equation specifying the equity capital ratio as a function of the firm’s profit efficiency and other variables is used to test the net effects of the efficiency-risk and franchise-value hypotheses. Both equations are econometrically identified through exclusion restrictions that are consistent with the theories.Third, some, but not all of the prior studies did not take ownership structure into account. Under virtually any theory of agency costs, ownership structure is important, since it is the separation of ownership and control that creates agency costs (e.g., Barnea, Haugen, and Senbet 1985). Greater insider shares may reduce agency costs, although the effect may be reversed at very high levels of insider holdings (e.g., Morck, Shleifer, and Vishny 1988). As well, outside block ownership or institutional holdings tend to mitigate agency costs by creating a relatively efficient monitor of the managers (e.g., Shleifer and Vishny 1986). Exclusion of the ownership variables may bias the test results because the ownership variables may be correlated with the dependent variable in the agency cost equation (performance) and with the key exogenous variable (leverage) through the reverse causality hypotheses noted above.To address this third problem, we include ownership structure variables in the agency cost equation explaining profit efficiency. We include insider ownership, outside block holdings, and institutional holdings.Our application to data from the banking industry is advantageous because of the abundance of quality data available on firms in this industry. In particular, we have detailed financial data for a large number of firms producing comparable products with similar technologies, and information on market prices and other exogenous conditions in the local markets in which they operate. In addition, some studies in this literature find evidence of the link between the efficiency of firms and variables that are recognized to affect agency costs, including leverage andownership structure (see Berger and Mester 1997 for a review).Although banking is a regulated industry, banks are subject to the same type of agency costs and other influences on behavior as other industries. The banks in the sample are subject to essentially equal regulatory constraints, and we focus on differences across banks, not between banks and other firms. Most banks are well above the regulatory capital minimums, and our results are based primarily on differences at the margin, rather than the effects of regulation. Our test of the agency costs hypothesis using data from one industry may be built upon to test a number of corporate finance hypotheses using information on virtually any industry.We test the agency costs hypothesis of corporate finance, under which high leverage reduces the agency costs of outside equity and increases firm value by constraining or encouraging managers to act more in the interests of shareholders. Our use of profit efficiency as an indicator of firm performance to measure agency costs, our specification of a two-equation structural model that takes into account reverse causality from firm performance to capital structure, and our inclusion of measures of ownership structure address problems in the extant empirical literature that may help explain why prior empirical results have been mixed. Our application to the banking industry is advantageous because of the detailed data available on a large number of comparable firms and the exogenous conditions in their local markets. Although banks are regulated, we focus on differences across banks that are driven by corporate governance issues, rather than any differences in-regulation, given that all banks are subject to essentially the same regulatory framework and most banks are well above the regulatory capital minimums.Our findings are consistent with the agency costs hypothesis – higher leverage or a lower equity capital ratio is associated with higher profit efficiency, all else equal. The effect is economically significant as well as statistically significant. An increase in leverage as represented by a 1 percentage point decrease in the equity capital ratio yields a predicted increase in profit efficiency of about 6 percentage points, or a gain of about 10% in actual profits at the sample mean. This result is robust to a number of specification changes, including different measures of performance (standard profit efficiency, alternative profit efficiency, and return on equity), different econometric techniques (two-stage least squares and OLS), different efficiency measurement methods (distribution-free and fixed-effects), different samples (the “ownership sample” of banks with detailed ownership data and the “full sample” of banks), and the different sample periods (1990s and 1980s).However, the data are not consistent with the prediction that the relationship between performance and leverage may be reversed when leverage is very high due to the agency costs of outside debt.We also find that profit efficiency is responsive to the ownership structure of the firm, consistent with agency theory and our argument that profit efficiency embeds agency costs. The data suggest that large institutional holders have favorable monitoring effects that reduce agency costs, although large individual investors do not. As well, the data are consistent with a non-monotonic relationship between performance and insider ownership, similar to findings in the literature.With respect to the reverse causality from efficiency to capital structure, we offer two competing hypotheses with opposite predictions, and we interpret our tests as determining which hypothesis empirically dominates the other. Under the efficiency-risk hypothesis, the expected high earnings from greater profit efficiency substitute for equity capital in protecting the firm from the expected costs of bankruptcy or financial distress, whereas under the franchise-value hypothesis, firms try to protect the expected income stream from high profit efficiency by holding additional equity capital. Neither hypothesis dominates the other for the ownership sample, but the substitution effect of the efficiency-risk hypothesis dominates for the full sample, suggesting a difference in behavior for the small banks that comprise most of the full sample.The approach developed in this paper can be built upon to test the agency costs hypothesis or other corporate finance hypotheses using data from virtually any industry. Future research could extend the analysis to cover other dimensions of capital structure. Agency theory suggests complex relationships between agency costs and different types of securities. We have analyzed only one dimension of capital structure, the equity capital ratio. Future research could consider other dimensions, such as the use of subordinated notes and debentures, or other individual debt or equity instruments.译文资本结构与企业绩效资料来源: 联邦储备系统理事会作者：Allen N. Berger 在财务和非财务行业，代理成本在公司治理中都是重要的问题。
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文献信息：文献标题：The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana（资本结构的影响：对加纳上市公司盈利的实证分析）国外作者：Joshua Abor文献出处：《Journal of Risk Finance》, 2005, 6(November):438-445字数统计：英文2997单词，16133字符；中文4709汉字外文文献：The effect of capital structure on profitability: an empiricalanalysis of listed firms in GhanaAbstractPurpose–This paper seeks to investigate the relationship between capital structure and profitability of listed firms on the Ghana Stock Exchange (GSE) during a five-year period.Design/methodology/approach–Regression analysis is used in the estimation of functions relating the return on equity (ROE) with measures of capital structure.Findings–The results reveal a significantly positive relation between the ratio of short-term debt to total assets and ROE. However, a negative relationship between the ratio of long-term debt to total assets and ROE was found. With regard to the relationship between total debt and return rates, the results show a significantly positive association between the ratio of total debt to total assets and return on equity.Originality/value–The research suggests that profitable firms depend more on debt as their main financing option. In the Ghanaian case, a high proportion (85 percent) of the debt is represented in short-term debt.Keywords Capital structure, Profit, Gearing, GhanaIntroductionThe capital structure decision is crucial for any business organization. The decision is important because of the need to maximize returns to various organizational constituencies, and also because of the impact such a decision has on a firm’s ability to deal with its competitive environment. The capital structure of a firm is actually a mix of different securities. In general, a firm can choose among many alternative capital structures. It can issue a large amount of debt or very little debt. It can arrange lease financing, use warrants, issue convertible bonds, sign forward contracts or trade bond swaps. It can issue dozens of distinct securities in countless combinations; however, it attempts to find the particular combination that maximizes its overall market value. A number of theories have been advanced in explaining the capital structure of firms. Despite the theoretical appeal of capital structure, researchers in financial management have not found the optimal capital structure. The best that academics and practitioners have been able to achieve are prescriptions that satisfy short-term goals. For example, the lack of a consensus about what would qualify as optimal capital structure has necessitated the need for this research. A better understanding of the issues at hand requires a look at the concept of capital structure and its effect on firm profitability. This paper examines the relationship between capital structure and profitability of companies listed on the Ghana Stock Exchange during the period 1998-2002. The effect of capital structure on the profitability of listed firms in Ghana is a scientific area that has not yet been explored in Ghanaian finance literature.The paper is organized as follows. The following section gives a review of the extant literature on the subject. The next section describes the data and justifies the choice of the variables used in the analysis. The model used in the analysis is then estimated. The subsequent section presents and discusses the results of the empirical analysis. Finally, the last section summarizes the findings of the research and also concludes the discussion.Literature on capital structureThe relationship between capital structure and firm value has been the subject of considerable debate. Throughout the literature, debate has centered on whether there is an optimal capital structure for an individual firm or whether the proportion of debt usage is irrelevant to the individual firm’s value. The capital structure of a firm concerns the mix of debt and equity the firm uses in its operation. Brealey and Myers (2003) contend that the choice of capital structure is fundamentally a marketing problem. They state that the firm can issue dozens of distinct securities in countless combinations, but it attempts to find the particular combination that maximizes market value. According to Weston and Brigham (1992), the optimal capital structure is the one that maximizes the market value of the firm’s outstanding shares.The seminal work by Modigliani and Miller (1958) in capital structure provided a substantial boost in the development of the theoretical framework within which various theories were about to emerge in the future. Modigliani and Miller (1958) concluded to the broadly known theory of “capital structure irrelevance”where financial leverage does not affect the firm’s market value. However their theory was based on very restrictive assumptions that do not hold in the real world. These assumptions include perfect capital markets, homogenous expectations, no taxes, and no transaction costs. The presence of bankruptcy costs and favorable tax treatment of interest payments lead to the notion of an “optimal”capital structure which maximizes the value of the firm, or respectively minimizes its total cost of capital.Modigliani and Miller (1963) reviewed their earlier position by incorporating tax benefits as determinants of the capital structure of firms. The key feature of taxation is that interest is a tax-deductible expense. A firm that pays taxes receives a partially offsetting interest “tax-shield”in the form of lower taxes paid. Therefore, as Modigliani and Miller (1963) propose, firms should use as much debt capital as possible in order to maximize their value. Along with corporate taxation, researcherswere also interested in analyzing the case of personal taxes imposed on individuals. Miller (1977), based on the tax legislation of the USA, discerns three tax rates that determine the total value of the firm. These are:(1)the corporate tax rate;(2)the tax rate imposed on the income of the dividends; and(3)the tax rate imposed on the income of interest inflows.According to Miller (1977), the value of the firm depends on the relative level of each tax rate, compared with the other two.Other theories that have been advanced to explain the capital structure of firms include bankruptcy cost, agency theory, and the pecking order theory. These theories are discussed in turn.Bankruptcy costs are the cost directly incurred when the perceived probability that the firm will default on financing is greater than zero. The bankruptcy probability increases with debt level since it increases the fear that the company might not be able to generate profits to pay back the interest and the loans. The potential costs of bankruptcy may be both direct and indirect. Examples of direct bankruptcy costs are the legal and administrative costs in the bankruptcy process. Examples of indirect bankruptcy costs are the loss in profits incurred by the firm as a result of the unwillingness of stakeholders to do business with them (Titman, 1984). The use of debt in capital structure of the firm also leads to agency costs. Agency costs arise as a result of the relationships between shareholders and managers and those between debt-holders and shareholders (Jensen and Meckling, 1976). The need to balance gains and costs of debt financing emerged as a theory known as the static trade-off theory by Myers (1984). It values the company as the value of the firm if unlevered plus the present value of the tax shield minus the present value of bankruptcy and agency costs.The concept of optimal capital structure is also expressed by Myers (1984) and Myers and Majluf (1984), based on the notion of asymmetric information. The existence of information asymmetries between the firm and likely finance providers causes the relative costs of finance to vary between the different sources of finance.For instance, an internal source of finance where the funds provider is the firm will have more information about the firm than new equity holders; thus, these new equity holders will expect a higher rate of return on their investments. This means that it will cost the firm more to issue fresh equity shares than using internal funds. Similarly, this argument could be provided between internal finance and new debt holders. The conclusion drawn from the asymmetric information theories is that there is a hierarchy of firm preferences with respect to the financing of their investments (Myers and Majluf, 1984). This “pecking order” theory suggests that firms will initially rely on internally generated funds, i.e. undistributed earnings, where there is no existence of information asymmetry, then they will turn to debt if additional funds are needed and finally they will issue equity to cover any remaining capital requirements. The order of preferences reflects the relative costs of various financing options.The pecking order hypothesis suggests that firms are willing to sell equity when the market overvalues it (Myers, 1984; Chittenden et al., 1996). This is based on the assumption that managers act in favor of the interest of existing shareholders. As a consequence, they refuse to issue undervalued shares unless the value transfer from “old” to new shareholders is more than offset by the net present value of the growth opportunity. This leads to the conclusion that new shares will only be issued at a higher price than that imposed by the real market value of the firm. Therefore, investors interpret the issuance of equity by a firm as signal of overpricing. If external financing is unavoidable, the firm will opt for secured debt as opposed to risky debt and firms will only issue common stocks as a last resort. Myers and Majluf (1984), maintain that firms would prefer internal sources to costly external finance. Thus, according to the pecking order hypothesis, firms that are profitable and therefore generate high earnings are expected to use less debt capital than those that do not generate high earnings. Several researchers have tested the effects of profitability on firm leverage. Friend and Lang (1988) and Kester (1986) find a significantly negative relation between profitability and debt/asset ratios. Rajan and Zingales (1995) and Wald (1999) also confirm a significantly negative correlation between profitability and leverage.Fama and French (1998), analyzing the relationship among taxes, financing decisions, and the firm’s value, concluded that the debt does not concede tax benefits. Besides, the high leverage degree generates agency problems among shareholders and creditors that predict negative relationships between leverage and profitability. Therefore, negative information relating debt and profitability obscures the tax benefit of the debt. Booth et al. (2001) developed a study attempting to relate the capital structure of several companies in countries with extremely different financial markets. They concluded that the variables that affect the choice of the capital structure of the companies are similar, in spite of the great differences presented by the financial markets. Besides, they concluded that profitability has an inverse relationship with debt level and size of the firm. Graham (2000) concluded in his work that big and profitable companies present a low debt rate. Mesquita and Lara (2003) found in their study that the relationship between rates of return and debt indicates a negative relationship for long-term financing. However, they found a positive relationship for short-term financing and equity.Hadlock and James (2002) concluded that companies prefer loan (debt) financing because they anticipate a higher return. Taub (1975) also found significant positive coefficients for four measures of profitability in a regression of these measures against debt ratio. Petersen and Rajan (1994) identified the same association, but for industries. Baker (1973), who worked with a simultaneous equations model, and Nerlove (1968) also found the same type of association for industries. Roden and Lewellen (1995) found a significant positive association between profitability and total debt as a percentage of the total buyout-financing package in their study on leveraged buyouts. Champion (1999) suggested that the use of leverage was one way to improve the performance of an organization.In summary, there is no universal theory of the debt-equity choice. Different views have been put forward regarding the financing choice. The present study investigates the effect of capital structure on profitability of listed firms on the GSE.MethodologyThis study sampled all firms that have been listed on the GSE over a five-year period (1998-2002). Twenty-two firms qualified to be included in the study sample. Variables used for the analysis include profitability and leverage ratios. Profitability is operationalized using a commonly used accounting-based measure: the ratio of earnings before interest and taxes (EBIT) to equity. The leverage ratios used include:●short-term debt to the total capital;●long-term debt to total capital; and●total debt to total capital.Firm size and sales growth are also included as control variables.The panel character of the data allows for the use of panel data methodology. Panel data involves the pooling of observations on a cross-section of units over several time periods and provides results that are simply not detectable in pure cross-sections or pure time-series studies. A general model for panel data that allows the researcher to estimate panel data with great flexibility and formulate the differences in the behavior of the cross-section elements is adopted. The relationship between debt and profitability is thus estimated in the following regression models: ROE i,t=β0 +β1SDA i,t +β2SIZE i,t +β3SG i,t + ëi,t (1)ROE i,t=β0 +β1LDA i,t +β2SIZE i,t +β3SG i,t + ëi,t (2)ROE i,t=β0 +β1DA i,t +β2SIZE i,t +β3SG i,t + ëi,t (3)where:. ROE i,t is EBIT divided by equity for firm i in time t;. SDA i,t is short-term debt divided by the total capital for firm i in time t;. LDA i,t is long-term debt divided by the total capital for firm i in time t;. DA i,t is total debt divided by the total capital for firm i in time t;. SIZE i,t is the log of sales for firm i in time t;. SG i,t is sales growth for firm i in time t; and. ëi,t is the error term.Empirical resultsTable I provides a summary of the descriptive statistics of the dependent and independent variables for the sample of firms. This shows the average indicators of variables computed from the financial statements. The return rate measured by return on equity (ROE) reveals an average of 36.94 percent with median 28.4 percent. This picture suggests a good performance during the period under study. The ROE measures the contribution of net income per cedi (local currency) invested by the firms’stockholders; a measure of the efficiency of the owners’invested capital. The variable SDA measures the ratio of short-term debt to total capital. The average value of this variable is 0.4876 with median 0.4547. The value 0.4547 indicates that approximately 45 percent of total assets are represented by short-term debts, attesting to the fact that Ghanaian firms largely depend on short-term debt for financing their operations due to the difficulty in accessing long-term credit from financial institutions. Another reason is due to the under-developed nature of the Ghanaian long-term debt market. The ratio of total long-term debt to total assets (LDA) also stands on average at 0.0985. Total debt to total capital ratio (DA) presents a mean of 0.5861. This suggests that about 58 percent of total assets are financed by debt capital. The above position reveals that the companies are financially leveraged with a large percentage of total debt being short-term.Regression analysis is used to investigate the relationship between capital structure and profitability measured by ROE. Ordinary least squares (OLS) regression results are presented in Table II. The results from the regression models (1), (2), and (3) denote that the independent variables explain the debt ratio determinations of the firms at 68.3, 39.7, and 86.4 percent, respectively. The F-statistics prove the validity of the estimated models. Also, the coefficients are statistically significant in level ofconfidence of 99 percent.The results in regression (1) reveal a significantly positive relationship between SDA and profitability. This suggests that short-term debt tends to be less expensive, and therefore increasing short-term debt with a relatively low interest rate will lead to an increase in profit levels. The results also show that profitability increases with the control variables (size and sales growth). Regression (2) shows a significantly negative association between LDA and profitability. This implies that an increase in the long-term debt position is associated with a decrease in profitability. This is explained by the fact that long-term debts are relatively more expensive, and therefore employing high proportions of them could lead to low profitability. The results support earlier findings by Miller (1977), Fama and French (1998), Graham (2000) and Booth et al. (2001). Firm size and sales growth are again positively related to profitability.The results from regression (3) indicate a significantly positive association between DA and profitability. The significantly positive regression coefficient for total debt implies that an increase in the debt position is associated with an increase in profitability: thus, the higher the debt, the higher the profitability. Again, this suggests that profitable firms depend more on debt as their main financing option. This supports the findings of Hadlock and James (2002), Petersen and Rajan (1994) and Roden and Lewellen (1995) that profitable firms use more debt. In the Ghanaian case, a high proportion (85 percent) of debt is represented by short-term debt. The results also show positive relationships between the control variables (firm size and sale growth) and profitability.ConclusionsThe capital structure decision is crucial for any business organization. The decision is important because of the need to maximize returns to various organizational constituencies, and also because of the impact such a decision has on an organization’s ability to deal with its competitive environment. This present study evaluated the relationship between capital structure and profitability of listed firms on the GSE during a five-year period (1998-2002). The results revealed significantly positive relation between SDA and ROE, suggesting that profitable firms use more short-term debt to finance their operation. Short-term debt is an important component or source of financing for Ghanaian firms, representing 85 percent of total debt financing. However, the results showed a negative relationship between LDA and ROE. With regard to the relationship between total debt and profitability, the regression results showed a significantly positive association between DA and ROE. This suggests that profitable firms depend more on debt as their main financing option. In the Ghanaian case, a high proportion (85 percent) of the debt is represented in short-term debt.中文译文：资本结构的影响：对加纳上市公司盈利的实证分析摘要目的–本文旨在调查在五年期间的资本结构和加纳联合交易所对上市公司的盈利能力之间的关系。