Internationalization and Zero Leverage

Sivaprasad, S., Chatzivgeri, E., Dontis-Charitos, P. and Williams, J. 2024. Internationalization and Zero Leverage. European Journal of Finance. 30 (11), pp. 1185-1211. https://doi.org/10.1080/1351847x.2023.2277273

TitleInternationalization and Zero Leverage
TypeJournal article
AuthorsSivaprasad, S., Chatzivgeri, E., Dontis-Charitos, P. and Williams, J.
Abstract

Despite growing attention on the role of internationalization in capital structure and the increasing adoption of zero-leverage policies by multinationals (MNC), no study examines the effect of internationalization on zero leverage. Using data from the United Kingdom (UK), we present the first empirical evidence of a positive and significant relationship that increases in the level of internationalization both statistically and economically. We find that the motivation for zero leverage differs between MNC and domestic firms (DOM). Whilst the major driving factor for MNC is the maintenance of financial flexibility, financial constraints motivate DOM.

KeywordsCapital structure
Zero leverage
Internationalization
Multinational corporations
JournalEuropean Journal of Finance
Journal citation30 (11), pp. 1185-1211
ISSN1351-847X
Year2024
PublisherTaylor & Francis
Publisher's version
License
CC BY 4.0
File Access Level
Open (open metadata and files)
Digital Object Identifier (DOI)https://doi.org/10.1080/1351847x.2023.2277273
Publication dates
Published online14 Nov 2023
Published in print2024

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