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Capital Structures and Internationalisation

Lundberg, Barbro; Nilsson, Nicole and Björk, Charlotta (2001)
Department of Business Administration
Abstract
Abstract The internationalisation of a company is enabled by integration of markets. New markets mean new revenues, but also demand capital to finance the expansion. To bring in new capital may offer new possibilities but also higher debt-equity ratios, which affect how external interested parties value the company. This thesis, inspired by previous and mainly US based research, researches the debt-equity ratio of Swedish multinational and domestic companies, sampled from the Stockholm Stock Exchange. The research questions have focused on the impact of certain internationalisation variables on the debt-equity ratio; how does the debt-equity ratio differ between international and domestic companies? Can a difference be explained by the... (More)
Abstract The internationalisation of a company is enabled by integration of markets. New markets mean new revenues, but also demand capital to finance the expansion. To bring in new capital may offer new possibilities but also higher debt-equity ratios, which affect how external interested parties value the company. This thesis, inspired by previous and mainly US based research, researches the debt-equity ratio of Swedish multinational and domestic companies, sampled from the Stockholm Stock Exchange. The research questions have focused on the impact of certain internationalisation variables on the debt-equity ratio; how does the debt-equity ratio differ between international and domestic companies? Can a difference be explained by the degree of internationalisation? Can a difference be better explained by the presence of international ownership? By measuring the concept internationalisation as both trade and presence, the questions were operationalised into four hypotheses. The theories used in connection were the agency, bankruptcy and trade-off theories, as well as previous studies’ ideas on owner influences. The gathered data was statistically analysed using SPSS, where none of the hypotheses were found statistically significant. This can be explained by the expectations having been based on the previous research, and because the Swedish market is genuinely different in structure from markets where the previous research were conducted (size, legislation etc.) these assumptions were found inapplicable. Because the Swedish market is small, we further conclude, even the relatively few large companies that exist are not large enough to draw benefits from their size. (Less)
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author
Lundberg, Barbro; Nilsson, Nicole and Björk, Charlotta
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
Capital Structures and Internationalisation, Debt ratio, Debt-equity ratio, Leverage, Management of enterprises, Företagsledning, management
language
Swedish
id
1341485
date added to LUP
2001-10-19
date last changed
2012-04-02 14:09:01
@misc{1341485,
  abstract     = {Abstract The internationalisation of a company is enabled by integration of markets. New markets mean new revenues, but also demand capital to finance the expansion. To bring in new capital may offer new possibilities but also higher debt-equity ratios, which affect how external interested parties value the company. This thesis, inspired by previous and mainly US based research, researches the debt-equity ratio of Swedish multinational and domestic companies, sampled from the Stockholm Stock Exchange. The research questions have focused on the impact of certain internationalisation variables on the debt-equity ratio; how does the debt-equity ratio differ between international and domestic companies? Can a difference be explained by the degree of internationalisation? Can a difference be better explained by the presence of international ownership? By measuring the concept internationalisation as both trade and presence, the questions were operationalised into four hypotheses. The theories used in connection were the agency, bankruptcy and trade-off theories, as well as previous studies’ ideas on owner influences. The gathered data was statistically analysed using SPSS, where none of the hypotheses were found statistically significant. This can be explained by the expectations having been based on the previous research, and because the Swedish market is genuinely different in structure from markets where the previous research were conducted (size, legislation etc.) these assumptions were found inapplicable. Because the Swedish market is small, we further conclude, even the relatively few large companies that exist are not large enough to draw benefits from their size.},
  author       = {Lundberg, Barbro and Nilsson, Nicole and Björk, Charlotta},
  keyword      = {Capital Structures and Internationalisation,Debt ratio,Debt-equity ratio,Leverage,Management of enterprises,Företagsledning, management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Capital Structures and Internationalisation},
  year         = {2001},
}