Economics, Econometrics and Finance
8 years ago

Firms in Nordic Market Adjust Capital Structure to Meet Targets Over Time.

Determinants of Changes in Capital Structure on the Nordic Market
Andrei Sandu, Anastasia Korneva

Paper Summary

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The study looked at how companies in the Nordic market change their debt levels over time. They found that changes in debt are mainly influenced by factors like profitability, market timing, and deviations from target debt levels. Profitability and timing have long-lasting effects on debt levels, while companies tend to adjust their debt to meet their target levels over time. This shows that firms do have preferred debt levels, but other factors can cause them to deviate from these targets.