Abstract
This paper examines whether there are systematic differences in the traditional capital structure determinants between MNCs and DCs, and if there are additional, uniquely international factors that may help explain the capital structure choice of multinational corporations. The results suggest that specific international factors such as political risk and exchange rate risk are relevant to the multinational capital structure decision, that multinationals have higher agency costs than purely domestic firms, and that international diversification does not lower earnings volatility for multinational corporations.
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*Todd Burgman is Assistant Professor of Finance in the Graduate Management Institute at Union College, Schenectady, New York. His current research focuses on the financial management of multinational corporations, and on the financial management implications of various corporate governance systems.
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Burgman, T. An Empirical Examination of Multinational Corporate Capital Structure. J Int Bus Stud 27, 553–570 (1996). https://doi.org/10.1057/palgrave.jibs.8490143
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DOI: https://doi.org/10.1057/palgrave.jibs.8490143