Internationalization and zero leverage

Eleni Chatzivgeri; Panagiotis Dontis-Charitos; Sheeja Sivaprasad; Jonathan Williams

doi:10.1080/1351847X.2023.2277273

Internationalization and zero leverage

Eleni Chatzivgeri, Panagiotis Dontis-Charitos, Sheeja Sivaprasad, Jonathan Williams

Business School

Research output: Contribution to journal › Article › peer-review

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.

Original language	English
Pages (from-to)	1-27
Journal	The European Journal of Finance
Early online date	14 Nov 2023
DOIs	https://doi.org/10.1080/1351847X.2023.2277273
Publication status	E-pub ahead of print - 14 Nov 2023

Keywords / Materials (for Non-textual outputs)

capital structure
zero leverage
internationalization
multinational corporations

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ChatzivgeriEtal2023EJFInternationalizationAndZeroLeverageFinal published version, 2.91 MBLicence: Creative Commons: Attribution (CC-BY)

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title = "Internationalization and zero leverage",

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.",

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AB - 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.

KW - capital structure

KW - zero leverage

KW - internationalization

KW - multinational corporations

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JF - The European Journal of Finance

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Internationalization and zero leverage

Abstract

Keywords / Materials (for Non-textual outputs)

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