International Differences in Capital Structure Norms: An Empirical Study of Large European Companies.

The article assess the validity of some of the possible determinants of capital structure. The main purpose of this paper is to assess the validity of some of the possible determinants of capital structure among large European industrials. A secondary purpose is to test the hypothesis that there exist international differences in capital structure norms among the large companies in various European countries. International differences in capital structure norms can be of great importance as determinants of the capital structure of the foreign affiliates of multinational companies. In addition, results of such research would also be useful in comparative analyses of financial markets and systems in different countries. The first part of this paper is a brief survey of the literature regarding published studies of international differences in capital structure and of the determinants of capital structure. In the second part, new data and findings are presented. The paper concludes with a summary of the findings and suggestions for further research.