Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259842 
Year of Publication: 
2000
Series/Report no.: 
Working Paper No. 2000:20
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract: 
This paper introduces a new approach of testing capital structure hypothesis on a firm specific level. Johansen's procedure for cointegration testing is employed to test theories of optimal capital structure. The sample covers a firm with unique properties, Hufvudstaden, during the period 1938 until present. The approach of cointegration allows testing of long-run equilibrium between non-stationary time-series. We find empirical support that capital structure follow a dynamic equilibrium path. However, this equilibrium is more complex as posited by existing theories. The result is found for leverage measured as both book-value- and market-value-of-equity.
Subjects: 
capital structure
cointegration
dynamic capital structure
JEL: 
C32
G32
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.