Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure?

Albert Danso, Samuel Fosu, Samuel Owusu-Agyei, Collins G. Ntim, Emmanuel Adegbite

Research output: Contribution to journalArticlepeer-review

22 Citations (Scopus)


We investigate firm-level determinants of capital structure using a large sample of 4,284 Japanese firms over a 19-year period (i.e., over 61,000 firm-year observations), a hitherto less examined sample for this purpose. We conduct our analysis and interpret our findings predominantly within the pecking order, the trade-off and the agency theoretical frameworks. We uncover three new findings. First, our evidence indicates that insights derived from the extant literature on capital structure are cross-national and are applicable in the context of Japan, despite the unique characteristics of Japanese firms. Second, financial crisis significantly impacts the relationship between leverage and firm-level determinants, particularly accentuating the effect of asset tangibility and growth. Third, product market competition significantly impacts the observed relationship between firm-level determinants and leverage. Our results are robust, controlling for the joint effects of competition and crisis.

Original languageEnglish
Pages (from-to)5073-5092
Number of pages20
JournalInternational Journal of Finance and Economics
Issue number4
Publication statusPublished - Oct 2021


  • agency theory
  • capital structure
  • competition
  • financial crisis
  • keiretsu, Japan

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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