Haan, D.J. (Daniel) de (2012) FIRM INTERNATIONALIZATION AND CAPITAL STRUCTURE IN DEVELOPING COUNTRIES: THE ROLE OF HOME COUNTRY FINANCIAL DEVELOPMENT. thesis, Other studies (UMCG).
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Abstract
With the ascendance of developing market firms in the world economy, the issue of how international expansion influences their capital structure is becoming increasingly pertinent. This paper investigates the combined effect of home country financial development and firm internationalization on capital structure in developing countries. While the standalone effects of these two factors on financing decisions have been documented at length, the combined effect has to date not been assessed in the literature. This paper first revisits the standalone effects and presents some interesting new insights particularly into the consequences they have for debt maturity amongst developing country firms. Thereafter, the combined effect is investigated and it is found that when it comes to the impact of internationalization on corporate financing decisions, home country financial development matters. It is shown that amongst developing countries, firm internationalization can bring with it a decrease in the agency costs of debt, increasing the reliance on long term debt. The scale of this benefit, however, seems to depend on the level of development of the banking sector in the home market.
| Item Type: | Thesis (Thesis) |
|---|---|
| Faculty: | Economics and Business |
| Keywords: | capital structure,, Agency costs,, Financial development,, Internationalization,, developing countries |
| Date Deposited: | 25 Jun 2020 10:55 |
| Last Modified: | 25 Jun 2020 10:55 |
| URI: | https://umcg.studenttheses.ub.rug.nl/id/eprint/1617 |
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