HYPERION ECONOMIC JOURNAL

Hyperion University of Bucharest
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HYPERION ECONOMIC JOURNAL

December 2024
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The Impact of Capital Structure on Stock Returns: International Evidence

Keywords: Capital structure , Stock return , Stock market , Industrial sector , Financial ratio , International markets , Panel data

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Authors:
  • Reza Tahmoorespour, Affiliation: Graduate School of Management (GSM), University Putra Malaysia (UPM);
  • Mina Ali-Abbar, Affiliation: Graduate School of Management (GSM), University Putra Malaysia (UPM);
  • Elias Randjbaran, Affiliation: Faculty of Engineering, University Putra Malaysia (UPM).
Pages:  56 : 78
Abstract:

This study examines the relationship between capital structure and stock returns of firms in the following eight countries in the Asia Pacific regionfor a period of 22 years from 1990 to 2012. The methodology is Panel Regression. The results indicate that the effect of capital structure depends on the nature of industry as well as market. In Australia, China, and Korea, return of companies in the Basic Material industry have negative relationship with debt to common equity. Long term debt to common equity positively affects the return of firms in Australia and Korea in the Basic Material industry.
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