An empirical analysis of capital structure decisions in Dutch firms

A. de Jong

Research output: ThesisDoctoral Thesis

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Abstract

This Ph.D. thesis investigates capital structure decisions in Dutch firms. Firms are faced with the choice from a variety of sources of financing for the funding of their activities. These choices determine the firms' capital structures. Building on the well known theorems of Modigliani and Miller, theoretical contributions provided many potential explanations for the choice between debt and equity. Early studies involve taxation and bankruptcy costs. Recently, theoretical contributions are based on agency oblems, which are caused by asymmetric information and divergent interests. This thesis consists of three studies that aim to test the empirical relevance of a selection of theories for Dutch exchange-listed firms. In the third study, a novel empirical a roach on the basis of questionnaires is advocated and implemented. The results of the tests show the relevance of theories of bankruptcy costs and tax benefits that are associated with debt. No evidence is found for the existence of a relation between cap al structure and the manifestation of agency problems between the providers of debt and equity. On the contrary, agency problems between managers and providers of equity are found to play a prominent role in the Netherlands.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Tilburg University
Supervisors/Advisors
  • Moerland, P.W., Promotor
  • Veld, C.H., Promotor
Award date16 Jun 1999
Place of PublicationTilburg
Publisher
Print ISBNs905668051X
Publication statusPublished - 1999

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Empirical analysis
Capital structure
Equity
Debt
Bankruptcy costs
Agency problems
Asymmetric information
Financing
Tax
Managers
Funding
Taxation
Questionnaire
The Netherlands

Cite this

de Jong, A. (1999). An empirical analysis of capital structure decisions in Dutch firms. Tilburg: CentER, Center for Economic Research.
de Jong, A.. / An empirical analysis of capital structure decisions in Dutch firms. Tilburg : CentER, Center for Economic Research, 1999. 201 p.
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abstract = "This Ph.D. thesis investigates capital structure decisions in Dutch firms. Firms are faced with the choice from a variety of sources of financing for the funding of their activities. These choices determine the firms' capital structures. Building on the well known theorems of Modigliani and Miller, theoretical contributions provided many potential explanations for the choice between debt and equity. Early studies involve taxation and bankruptcy costs. Recently, theoretical contributions are based on agency oblems, which are caused by asymmetric information and divergent interests. This thesis consists of three studies that aim to test the empirical relevance of a selection of theories for Dutch exchange-listed firms. In the third study, a novel empirical a roach on the basis of questionnaires is advocated and implemented. The results of the tests show the relevance of theories of bankruptcy costs and tax benefits that are associated with debt. No evidence is found for the existence of a relation between cap al structure and the manifestation of agency problems between the providers of debt and equity. On the contrary, agency problems between managers and providers of equity are found to play a prominent role in the Netherlands.",
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de Jong, A 1999, 'An empirical analysis of capital structure decisions in Dutch firms', Doctor of Philosophy, Tilburg University, Tilburg.

An empirical analysis of capital structure decisions in Dutch firms. / de Jong, A.

Tilburg : CentER, Center for Economic Research, 1999. 201 p.

Research output: ThesisDoctoral Thesis

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T1 - An empirical analysis of capital structure decisions in Dutch firms

AU - de Jong, A.

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N2 - This Ph.D. thesis investigates capital structure decisions in Dutch firms. Firms are faced with the choice from a variety of sources of financing for the funding of their activities. These choices determine the firms' capital structures. Building on the well known theorems of Modigliani and Miller, theoretical contributions provided many potential explanations for the choice between debt and equity. Early studies involve taxation and bankruptcy costs. Recently, theoretical contributions are based on agency oblems, which are caused by asymmetric information and divergent interests. This thesis consists of three studies that aim to test the empirical relevance of a selection of theories for Dutch exchange-listed firms. In the third study, a novel empirical a roach on the basis of questionnaires is advocated and implemented. The results of the tests show the relevance of theories of bankruptcy costs and tax benefits that are associated with debt. No evidence is found for the existence of a relation between cap al structure and the manifestation of agency problems between the providers of debt and equity. On the contrary, agency problems between managers and providers of equity are found to play a prominent role in the Netherlands.

AB - This Ph.D. thesis investigates capital structure decisions in Dutch firms. Firms are faced with the choice from a variety of sources of financing for the funding of their activities. These choices determine the firms' capital structures. Building on the well known theorems of Modigliani and Miller, theoretical contributions provided many potential explanations for the choice between debt and equity. Early studies involve taxation and bankruptcy costs. Recently, theoretical contributions are based on agency oblems, which are caused by asymmetric information and divergent interests. This thesis consists of three studies that aim to test the empirical relevance of a selection of theories for Dutch exchange-listed firms. In the third study, a novel empirical a roach on the basis of questionnaires is advocated and implemented. The results of the tests show the relevance of theories of bankruptcy costs and tax benefits that are associated with debt. No evidence is found for the existence of a relation between cap al structure and the manifestation of agency problems between the providers of debt and equity. On the contrary, agency problems between managers and providers of equity are found to play a prominent role in the Netherlands.

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de Jong A. An empirical analysis of capital structure decisions in Dutch firms. Tilburg: CentER, Center for Economic Research, 1999. 201 p. (CentER Dissertation Series).