Authors: Ilias Salatas, Konstantinos Gkillas, George Peppas, Athanasios Tsagkanos

Title: Capital structures of US market Firms and its determinants during different macroeconomic states and various leverage levels.

Abstract

Great development in the study of capital structure and its determinants has come out as a result to the analogous interest attracted from the econometric scientific community. A plethora of research studies have focused on decoding, under the trade off capital structure theory, the adjustment speed of debt ratio to the targeted debt leverage levels. In the present study, we use quantile regression partial adjustment model and not only provide proof of the behavioral variety of capital structure determinants in different leverage levels, but we also examine how these relationships are affected by crises in a span of 44 years. Slow adjustment speed is indicated by our findings regardless debt maturity distinction, lagged debt ratio is the main capital structure determinant and low leveraged firms tend to adjust their debt target faster than medium and high leveraged not only on normal macroeconomic periods but also over crisis periods although with a slower pace. Crises are not the same for all verifying that firms exposed to them like the U.S.A. (United States of America) firms of our sample are affected otherwise by firm specific and macroeconomic factors according to their debt level, debt maturity options and economic fallouts.