Abstract
Despite extensive research on the relationship between
internationalization and firm capital structure, findings in this
research area remain inconclusive. In this paper, we review the
literature on the internationalization–capital structure relationship
and investigate its direction, effect size, and multiple contingencies
through a meta-analysis of 31 studies with a grand total of 223,658 firm
observations and at least two separate samples each. Our cumulative
evidence indicates lower debt ratios of multinational corporations
compared to domestic corporations, in line with arguments of increased
risk and agency costs in international operations. We extend our
analysis to institutional characteristics in firms’ home countries and
find that much of the existing variation in study findings can be
explained using theory arguments on firm risk in internationalization.
We contribute to an integration of international business and finance
literature and point to directions for future research on determinants
of the internationalization–capital structure relationship and its
multiple contingencies.
Original language | English |
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Journal | International Business Review |
Volume | 27 |
Issue number | 6 |
Pages (from-to) | 1238-1249 |
Number of pages | 12 |
ISSN | 0969-5931 |
DOIs | |
Publication status | Published - Dec 2018 |
Externally published | Yes |
Keywords
- Capital structure
- Debt ratio
- International finance
- Internationalization
- Meta-analysis