Dynamic adjustment towards target capital structure: Thailand evidence

By employing panel data, the present study examines the dynamic aspects of capital structure of 269 non-financial listed firms in Thailand from 2000 to 2009. This is a relatively new area in finance literature. The present study investigates the existence of target capital structure, speed of adjust...

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Main Authors:	Razali Haron, Khairunisah Ibrahim, Fauzias Mat Nor, Izani Ibrahim
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2013
Online Access:	http://journalarticle.ukm.my/6986/ http://journalarticle.ukm.my/6986/ http://journalarticle.ukm.my/6986/1/4986-13953-1-PB.pdf

id	ukm-6986
recordtype	eprints
spelling	ukm-69862016-12-14T06:42:47Z http://journalarticle.ukm.my/6986/ Dynamic adjustment towards target capital structure: Thailand evidence Razali Haron, Khairunisah Ibrahim, Fauzias Mat Nor, Izani Ibrahim, By employing panel data, the present study examines the dynamic aspects of capital structure of 269 non-financial listed firms in Thailand from 2000 to 2009. This is a relatively new area in finance literature. The present study investigates the existence of target capital structure, speed of adjustment and factors affecting the speed of adjustment. The analyses are conducted using the dynamic Partial Adjustment Model (PAM) and estimated based on the Generalized Method of Moments. The results indicate the existence of target capital structure and firms undergone adjustment processes to be at their target capital structure from time to time with a considerably rapid speed of adjustment, consistent with the dynamic trade-off theory. Firms in Thailand are found to be under-adjusting, being below the required adjustment to be at the target within a year. Strong evidence exists that indicates that firm specific factors significantly influence speed of adjustment for firms in Thailand, such as distance from target, size of firm and profitability. Penerbit Universiti Kebangsaan Malaysia 2013 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/6986/1/4986-13953-1-PB.pdf Razali Haron, and Khairunisah Ibrahim, and Fauzias Mat Nor, and Izani Ibrahim, (2013) Dynamic adjustment towards target capital structure: Thailand evidence. Jurnal Pengurusan, 39 . pp. 73-82. ISSN 0127-2713 http://ejournals.ukm.my/pengurusan/index
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	By employing panel data, the present study examines the dynamic aspects of capital structure of 269 non-financial listed firms in Thailand from 2000 to 2009. This is a relatively new area in finance literature. The present study investigates the existence of target capital structure, speed of adjustment and factors affecting the speed of adjustment. The analyses are conducted using the dynamic Partial Adjustment Model (PAM) and estimated based on the Generalized Method of Moments. The results indicate the existence of target capital structure and firms undergone adjustment processes to be at their target capital structure from time to time with a considerably rapid speed of adjustment, consistent with the dynamic trade-off theory. Firms in Thailand are found to be under-adjusting, being below the required adjustment to be at the target within a year. Strong evidence exists that indicates that firm specific factors significantly influence speed of adjustment for firms in Thailand, such as distance from target, size of firm and profitability.
format	Article
author	Razali Haron, Khairunisah Ibrahim, Fauzias Mat Nor, Izani Ibrahim,
spellingShingle	Razali Haron, Khairunisah Ibrahim, Fauzias Mat Nor, Izani Ibrahim, Dynamic adjustment towards target capital structure: Thailand evidence
author_facet	Razali Haron, Khairunisah Ibrahim, Fauzias Mat Nor, Izani Ibrahim,
author_sort	Razali Haron,
title	Dynamic adjustment towards target capital structure: Thailand evidence
title_short	Dynamic adjustment towards target capital structure: Thailand evidence
title_full	Dynamic adjustment towards target capital structure: Thailand evidence
title_fullStr	Dynamic adjustment towards target capital structure: Thailand evidence
title_full_unstemmed	Dynamic adjustment towards target capital structure: Thailand evidence
title_sort	dynamic adjustment towards target capital structure: thailand evidence
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2013
url	http://journalarticle.ukm.my/6986/ http://journalarticle.ukm.my/6986/ http://journalarticle.ukm.my/6986/1/4986-13953-1-PB.pdf
first_indexed	2023-09-18T19:48:27Z
last_indexed	2023-09-18T19:48:27Z
_version_	1777406057728966656

Dynamic adjustment towards target capital structure: Thailand evidence

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