Political Risk in Multinational Corporations’ Capital Structure : Evidence from Singapore
In this paper, we examine the relationship between political risk as an international environmental determinant of capital structure as well as other factors that contribute to capital structure including leverage, foreign exchange risk, agency costs of debt, and collateral value of assets. We condu...
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Umeå universitet, Handelshögskolan vid Umeå universitet
2011
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ndltd-UPSALLA1-oai-DiVA.org-umu-452732013-01-08T13:31:45ZPolitical Risk in Multinational Corporations’ Capital Structure : Evidence from SingaporeengRasaei, JanetNguyen, KimUmeå universitet, Handelshögskolan vid Umeå universitetUmeå universitet, Handelshögskolan vid Umeå universitet2011capital structureleveragedeterminantspolitical riskmultinational corporationsSingaporeBusiness studiesFöretagsekonomiIn this paper, we examine the relationship between political risk as an international environmental determinant of capital structure as well as other factors that contribute to capital structure including leverage, foreign exchange risk, agency costs of debt, and collateral value of assets. We conducted this research on a sample of 200 Singaporean, non-financial, listed domiciled multinational firms over the period of 2005 to 2009. The results suggest that political risk is irrelevant to the multinational capital structure, foreign exchange risk, agency costs of debt, and (netted) collateral value of assets. We find that the results remain unchanged after controlling for size and industry. The findings produce evidence that foreign exchange risk, as another international factor is also irrelevant to the Singaporean multinational capital structure choice. Additionally, agency costs of debt and (netted) fixed assets have a negative association with leverage for Singaporean multinational corporations. Student thesisinfo:eu-repo/semantics/bachelorThesistexthttp://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-45273application/pdfinfo:eu-repo/semantics/openAccess |
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capital structure leverage determinants political risk multinational corporations Singapore Business studies Företagsekonomi |
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capital structure leverage determinants political risk multinational corporations Singapore Business studies Företagsekonomi Rasaei, Janet Nguyen, Kim Political Risk in Multinational Corporations’ Capital Structure : Evidence from Singapore |
description |
In this paper, we examine the relationship between political risk as an international environmental determinant of capital structure as well as other factors that contribute to capital structure including leverage, foreign exchange risk, agency costs of debt, and collateral value of assets. We conducted this research on a sample of 200 Singaporean, non-financial, listed domiciled multinational firms over the period of 2005 to 2009. The results suggest that political risk is irrelevant to the multinational capital structure, foreign exchange risk, agency costs of debt, and (netted) collateral value of assets. We find that the results remain unchanged after controlling for size and industry. The findings produce evidence that foreign exchange risk, as another international factor is also irrelevant to the Singaporean multinational capital structure choice. Additionally, agency costs of debt and (netted) fixed assets have a negative association with leverage for Singaporean multinational corporations. |
author |
Rasaei, Janet Nguyen, Kim |
author_facet |
Rasaei, Janet Nguyen, Kim |
author_sort |
Rasaei, Janet |
title |
Political Risk in Multinational Corporations’ Capital Structure : Evidence from Singapore |
title_short |
Political Risk in Multinational Corporations’ Capital Structure : Evidence from Singapore |
title_full |
Political Risk in Multinational Corporations’ Capital Structure : Evidence from Singapore |
title_fullStr |
Political Risk in Multinational Corporations’ Capital Structure : Evidence from Singapore |
title_full_unstemmed |
Political Risk in Multinational Corporations’ Capital Structure : Evidence from Singapore |
title_sort |
political risk in multinational corporations’ capital structure : evidence from singapore |
publisher |
Umeå universitet, Handelshögskolan vid Umeå universitet |
publishDate |
2011 |
url |
http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-45273 |
work_keys_str_mv |
AT rasaeijanet politicalriskinmultinationalcorporationscapitalstructureevidencefromsingapore AT nguyenkim politicalriskinmultinationalcorporationscapitalstructureevidencefromsingapore |
_version_ |
1716523197118021632 |