The role of legal domicile choice in capital structure decisions : Evidence from multinational corporations in the US and the UK

Abstract

This thesis considers international differences in corporate capital structure decisions. As far as the author is aware, little research has been conducted on this topic previously. The literature review describes three mainstream theories of capital structure and derives testable hypotheses for each theory. The methodology used to test the hypotheses is a mixture of previously used methodologies and newly developed methodologies. A unique panel dataset of large multinational corporations from the US and the UK was collected specifically for this thesis. Econometrics methods were used to test the validity of each capital structure theory and to identify differences between the US and the UK. The results were analysed and differences between the US and the UK were discussed in the context of previous research.