Optimal Capital Structure and Speed of Adjustment under Hyperinflation and Dollarization

Q2 Economics, Econometrics and Finance
Strike Mbulawa, N. Okurut, Mogale Ntsosa, N. Sinha
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引用次数: 2

Abstract

Economic challenges in Zimbabwe have resulted in firms being pushed out of their optimal leverage. Firms are faced with the need to move back to the optimal level of financing to improve their value. They tend to adjust quickly to the optimal level whenever failing to do so is costlier. This study employs a dynamic capital structure model to examine the determinants of optimal leverage and the speed of adjustment under a hyperinflation and dollarization period (2000–2016). The study shows that firms have an optimal leverage and there are costs of adjusting to this level of capital. Findings are consistent with theoretical predictions of the static trade-off theory (STT) and agency theory. The adjustment factors for all the models were found to be at least 0.475 and are higher under hyperinflation than under dollarization. Both firm and macroeconomic factors explain the optimal capital structure while the former also explains the speed of adjustment. Policies focusing on improving access to and reducing costs for finance will assist firms to maximize value as they adjust to the desired financing mix. The policies adopted may vary in response to the economic environment.
恶性通货膨胀与美元化下的最优资本结构与调整速度
津巴布韦的经济挑战导致企业失去了最佳杠杆。企业面临着回到最佳融资水平以提高其价值的需要。它们往往会迅速调整到最佳水平,而不这样做的代价更高。本研究采用动态资本结构模型来检验恶性通货膨胀和美元化时期(2000-2016)下最优杠杆率和调整速度的决定因素。这项研究表明,企业拥有最佳杠杆,调整到这个资本水平是有成本的。研究结果与静态权衡理论(STT)和代理理论的理论预测一致。所有模型的调整系数至少为0.475,在恶性通货膨胀下高于美元化下。企业和宏观经济因素都解释了最优资本结构,而前者也解释了调整的速度。侧重于改善融资渠道和降低融资成本的政策将有助于企业在适应所需融资组合时实现价值最大化。所采取的政策可能因经济环境而异。
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来源期刊
Global Journal of Emerging Market Economies
Global Journal of Emerging Market Economies Economics, Econometrics and Finance-Economics, Econometrics and Finance (miscellaneous)
CiteScore
2.70
自引率
0.00%
发文量
27
期刊介绍: Global Journal of Emerging Market Economies is a peer-reviewed journal. The aim of the journal is to provide an international platform for knowledge sharing, discussion and networking on the various aspects related to emerging market economies through publications of original research. It aims to make available basic reference material for policy-makers, business executives and researchers interested in issues of fundamental importance to the economic prospects and performance of emerging market economies. The topics for discussion are related to the following general categories: D. Microeconomics E. Macroeconomics and Monetary Economics F. International Economics G. Financial Economics H. Public Economics I. Health, Education, and Welfare J. Labor and Demographic Economics L. Industrial Organization O. Economic Development, Innovation, Technological Change, and Growth Q. Agricultural and Natural Resource Economics • Environmental and Ecological Economics R. Urban, Rural, Regional, Real Estate, and Transportation Economics Additionally, the journal would be most interested to publish topics related to Global Financial Crisis and the Impact on Emerging Market Economies Economic Development and Inclusive Growth Climate Change and Energy Infrastructure Development and Public Private Partnerships Capital Flows to and from Emerging Market Economies Regional Cooperation Trade and Investment and Development of National and Regional Financial Markets The Belt and Road Initiative.
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