2017•International Journal of Business and SocietyOpen access

UNOBSERVABLE EFFECTS AND SPEED OF ADJUSTMENT TO TARGET CAPITAL STRUCTURE

Bolaji Tunde Matemilola, Bany Ariffin Amin Noordin, Wan Azman Saini Wan Ngah, Annuar Nassir

Abstract

The paper investigates whether unobservable firm-specific effects such as managerial ability is a major component of the target capital structure. We apply the system generalized method of moments that accounts for unobservable firm-specific effects. Our results reveal that unobservable firm-specific effects such as managerial ability are a major component that explains most of the cross-sectional variation in firms’ capital structure in Malaysia.Keywords: Capital Structure; Unobservable Effects; System GMM; Malaysia.

Open-access reader

About this research paper

What this paper is about

Why it matters

OpenAlex reports 5 citations for this work. Citation counts describe recorded attention and do not establish research quality.

Key contribution

A contribution statement is not available in the OpenAlex record.

Method / approach

Method details are not available in the OpenAlex metadata.

Main findings

Findings are not separately available in the OpenAlex metadata.

Limitations

Limitations are not available in the OpenAlex metadata.

Applications

Application details are not available in the OpenAlex metadata.

Available abstract

Key concepts: Unobservable, Econometrics, Component (thermodynamics), Economics, Capital (architecture), Microeconomics, History, Physics