STRUCTURE OF ASSETS AND CAPITAL STRUCTURE. WHAT ARE THE RELATIONS WITH EACH OTHER? AN EMPIRICAL ANALYSIS OF A SAMPLE OF ITALY
Journal Title: European Journal of Business and Social Sciences - Year 2014, Vol 2, Issue 11
Abstract
Using a panel of 4,000 Italian firms (manufacturing SMEs) over the period from 2008 to 2011 we verify the impact and influences of structure of assets on corporate leverage. Empirically, we find a positive and economically large relation between total inventories and corporate leverage and between credit trade and debts. We also find some evidence that more liquid firms extend more credit to their customers and rely less on credit from their suppliers or banks. On the other hand the fixed assets index is not associated with leverage. The findings are not consistent with the hypotheses of literature. We found, in fact, that the relation between the total fixed assets and the level of debt is curvilinear. In addition, the results are consistent with the hypothesis that the solvency increase with asset liquidity. JEL Classifications: G32, G33
Authors and Affiliations
Marco Muscettola| Credit risk manager, Bari, Italy. Via Generale Scattaglia, 30/B – 70010 Adelfia (Ba) – tel +39 349 5210972 E-mail: marcomuscettola@hotmail.com
Keywords
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