Author(s)

Fan MO

Corresponding Author

Fan MO

Abstract

This paper attempts to explain the determinants of capital structure from a multi-level perspective. Instead of putting same weight on each variable, we firstly apply nonparametric methods to test the significance of industry factor, after which we build multiple linear regression to figure out the correlation between financial indicators and capital structure. Through the research, we have following conclusions: (1) There is homogeneity between corporates within the same industry. (2) The average level of capital structure differs significantly among industries in China. (3) The coefficient and significance of financial indicators have similarities and differences among industries, suggesting that industrial characteristics can influence the importance of some determinants.

Keywords

Determinants of capital structure, Industry classification, China A-shares, Nonparametric method, Multiple linear regression