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http://dx.doi.org/10.5762/KAIS.2012.13.5.2096

Determinants of Leverage for Manufacturing Firms Listed in the KOSDAQ Stock Market  

Kim, Han-Joon (Dept. of Business Administration, Hoseo University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.13, no.5, 2012 , pp. 2096-2109 More about this Journal
Abstract
This study investigates empirical issues that have received little attention in the previous research in the Korean capital market. It is to find any financial determinants on the capital structure for the firms listed in the KOSDAQ(Korea Securities Dealers Automated Quotation). Another test is performed to find any possible discriminating factors by utilizing a robust methodology, which may distinguish between the firms belonging the 'prime section' and the 'venture section' in terms of their financial aspects. Moreover, the null hypothesis that the changing trend or movement of a firm's capital structure with respect to its industry mean (or median) may be random, is also tested. For the book-value based debt ratios, size(INSIZE), growth(GROWTH), Market to book value of equity(MVBV), volatility(VOLATILITY), market value of equity (MVE) and section dummy (SECTION) showed their statistically significant effects on the book-value based leverage ratios, respectively, while size(INSIZE), growth(GROWTH), market value of equity(MVE), beta(BETA) and section dummy (SECTION) showed their statistically significant effects on the market-value based leverage ratios. This study also found an interesting result that a firm belonging to each corresponding industry has a tendency for reversion toward its mean and median leverage ratios over the five-year tested period.
Keywords
KOSDAQ; Capital Structure; Financial Characteristics; Fisher Exact Test; Mean Reversion;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
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