Capital Structure in U.S., a Quantile Regression Approach with Macroeconomic Impacts

TL;DR

This paper uses quantile regression to analyze how firm-specific and macroeconomic factors influence U.S. firms' capital structure across different leverage levels, revealing varying adjustment speeds for short-term and long-term debt.

Contribution

It introduces a quantile regression approach to study capital structure determinants across leverage distribution, incorporating macroeconomic impacts in the U.S. context.

Findings

Short-term debt increases with macroeconomic shifts.

Long-term debt ratio slows down in adjustment speed.

Different behaviors of debt types across leverage quantiles.

Abstract

The major perspective of this paper is to provide more evidence into the empirical determinants of capital structure adjustment in different macroeconomics states by focusing and discussing the relative importance of firm-specific and macroeconomic characteristics from an alternative scope in U.S. This study extends the empirical research on the topic of capital structure by focusing on a quantile regression method to investigate the behavior of firm-specific characteristics and macroeconomic variables across all quantiles of distribution of leverage (total debt, long-terms debt and short-terms debt). Thus, based on a partial adjustment model, we find that long-term and short-term debt ratios varying regarding their partial adjustment speeds; the short-term debt raises up while the long-term debt ratio slows down for same periods.