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Cited by 962

The DOI matches its Crossref record; 5 of the 5 references it cites were found in a registry or an index.

Do Tests of Capital Structure Theory Mean What They Say?

Open access
STREBULAEV, ILYA A.·2007·The Journal of Finance
DOI 10.1111/j.1540-6261.2007.01256.x
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Abstract

In the presence of frictions, firms adjust their capital structure infrequently. As a consequence, in a dynamic economy the leverage of most firms is likely to differ from the “optimum” leverage at the time of readjustment. This paper explores the empirical implications of this observation. I use a calibrated dynamic trade‐off model to simulate firms' capital structure paths. The results of standard cross‐sectional tests on these data are consistent with those reported in the empirical literature. In particular, the standard interpretation of some test results leads to the rejection of the underlying model. Taken together, the results suggest a rethinking of the way capital structure tests are conducted.

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Metadata

Authors
STREBULAEV, I. A.
Venue
The Journal of Finance
Publisher
Wiley
Published
2007-08
Volume
62
Issue
4
Pages
1747-1787
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/j.1540-6261.2007.01256.x
OpenAlex
W3122589234
Cited by
962
References
5
FWCI
174.84
Type
journal article
Language
en
Open access
green

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CoChat. (2026). Citation check: Do Tests of Capital Structure Theory Mean What They Say? https://app.cochat.ai/papers/10.1111/j.1540-6261.2007.01256.x
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STREBULAEV, I. A. (2007). Do Tests of Capital Structure Theory Mean What They Say? The Journal of Finance. https://doi.org/10.1111/j.1540-6261.2007.01256.x

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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.