This research investigates whether cultural variables explain diversity in corporate leverage in developing markets. Adaption in government borrowing, as well as macroeconomic uncertainty and financial sector expansion, play a larger effect. Individualism is highly positive connected with leverage except for short-term debt, while uncertainty-avoidance is negatively correlated with leverage except for long-term debt. We also investigate the buildup and dissipation of leverage by studying the relationship between company profitability, size, market to book, R&D, which all negatively connected while tangible assets remain positively related.
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