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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Article
The Financial Structure of Italian Companies
Author(s)
Carmelo Intrisano
Full-Text PDF
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DOI:10.17265/1537-1506/2012.08.006
Affiliation(s)
Carmelo Intrisano, Professor of Corporate Finance, Department of Economy and Jurisprudence, University of Cassino.
ABSTRACT
The choice of capital structure by firms is a recurring topic of corporate finance and evolving on a theoretical and empirical level. On a theoretical level, scholars propose variations to the models by removing the theoretical hypothesis or expanding variables considered, likewise, on an empirical level, researchers provide survey, which contributions aimed at increasing the understanding of the phenomenon as a whole, considering the possible events in the variety and variability of firms. In particular, one of the most debated topics in the literature regards the existence or absence of relationship between the choices of financial structure and firm value, or the determination of an optimal leverage for the value. Therefore, the attention of researchers has focused on the identification of relationship between debt and equity that maximizes firm’s performance and meet shareholders’ expectations in terms of return on capital employed for the same risk. Hence, the aim of this paper is to provide another piece to the cognitive complexity of the phenomenon, focusing the research on Italian firms, given the importance of leverage in the financial structure of Italian firms. The methodology used is based on the analysis conducted using the Mediobanca database aggregated sector by sector to identify the main determinants of financial structure. The conclusion is that it is not possible to say with certainty which financial structure theory better represents the behavior of Italian firms concerning financial structure.
KEYWORDS
choice of financial structure, debt financial, firm value, tax shield, tangible assets, coverage interest
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