Capital Structure Determinants within the Automotive Industry
(2018) NEKP03 20181Department of Economics
- Abstract
- This thesis aims to extend the capital structure literature and identify the firm specific determinants of leverage within the automotive industry, filling a gap in the academic literature, and providing a base for future research. Panel data comprised of 29 global automotive companies over a 10-year period, 2008-2017, is used to run OLS regressions on three classifications of capital structure: total debt, long-term debt, and short-term debt. Both the Pecking Order Theory and the Trade-off Theory are employed to offer predictions and justifications for the results detailed in this study. The empirical results identified in this thesis indicate that growth opportunities, the non-debt tax shield, and profitability produce a negative effect... (More)
- This thesis aims to extend the capital structure literature and identify the firm specific determinants of leverage within the automotive industry, filling a gap in the academic literature, and providing a base for future research. Panel data comprised of 29 global automotive companies over a 10-year period, 2008-2017, is used to run OLS regressions on three classifications of capital structure: total debt, long-term debt, and short-term debt. Both the Pecking Order Theory and the Trade-off Theory are employed to offer predictions and justifications for the results detailed in this study. The empirical results identified in this thesis indicate that growth opportunities, the non-debt tax shield, and profitability produce a negative effect to total leverage while firm size and asset tangibility have a positive correlation. These results were predominantly supported by Trade-off Theory and its implications regarding capital structure choice. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8946076
- author
- Bakardjiev, Nicolai LU
- supervisor
- organization
- course
- NEKP03 20181
- year
- 2018
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- Capital Structure, Trade-off Theory, Pecking Order Theory, Firm Specific Determinants, Panel Data Regression.
- language
- English
- id
- 8946076
- date added to LUP
- 2018-07-04 13:54:10
- date last changed
- 2018-07-04 13:54:10
@misc{8946076, abstract = {{This thesis aims to extend the capital structure literature and identify the firm specific determinants of leverage within the automotive industry, filling a gap in the academic literature, and providing a base for future research. Panel data comprised of 29 global automotive companies over a 10-year period, 2008-2017, is used to run OLS regressions on three classifications of capital structure: total debt, long-term debt, and short-term debt. Both the Pecking Order Theory and the Trade-off Theory are employed to offer predictions and justifications for the results detailed in this study. The empirical results identified in this thesis indicate that growth opportunities, the non-debt tax shield, and profitability produce a negative effect to total leverage while firm size and asset tangibility have a positive correlation. These results were predominantly supported by Trade-off Theory and its implications regarding capital structure choice.}}, author = {{Bakardjiev, Nicolai}}, language = {{eng}}, note = {{Student Paper}}, title = {{Capital Structure Determinants within the Automotive Industry}}, year = {{2018}}, }