The determinants of capital structure in Latin America: new evidence using firm and country variables

Abstract

The literature on capital structure determinants is extensive, so contributing to the field with both new variables that authors generally haven’t thought about to a geography that is not known as much as the United States and Europe seemed a good idea. The region has many specificities, especially at the institutional and macroeconomy level. Results show that the coefficients signs of Profitability and Tangibility are the same as the rest of the world, but we a higher magnitude. An ambiguity before, inflation indeed negatively affects leverage. Also, the more developed the financial environment, the higher the leverage.