Recent Evolutions of Capital Structure and Its Determinants: A Comparison of Major Stock Exchanges in Japan

The recent evolutions of corporate capital structure in Japan and its determinants were analyzed in this research, with special emphasis on comparison between firms in major stock exchanges. The specific questions examined in this study are: Do differences in debt regression coefficients exist between (1) Tokyo, Osaka, and JASDAQ exchanges?; (2) companies listed and delisted?, and (3) the contraction and expansion periods of the economy? Test results are as follows. First, the financial ratios of each stock exchange showed converging behavior over time. Second, differences in individual regression coefficients such as ROA and non-debt tax shield turned out to exist between listed and delisted firms. Third, the overall regression coefficients about debt ratios seemed to be differently influenced by the states of the economy.