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Статья

Empirical Testing of Dynamic Capital Structure Choice: Case of Russian Companies

Journal of Corporate Finance Research. 2010. No. 4(16). P. 31-40.
Shakhina N., Kokoreva M.

The article presents the results of empirically testing the predictions of the dynamic trade-off theory on the data of 56 Russian medium-sized companies. We use the data from 2004 to 2008 and show that the management behavior follows the principles of the dynamic trade-off concept. According to our analysis, the optimal interval for the company leverage becomes narrower as the profitability, size, growth opportunities and tangibility of a firm increase. Statistically significant difference between the lower and upper bounds of the interval confirms that the management adjusts the debt level targeting the optimal interval but not a specific optimal level.