Corporate governance influence on capital structure decisions International divergencies

Abstract

The dissertation aims to examine how the well-known trade-off between debt and equity always discussed in argumentations concerning financial policies of businesses is not only influenced, as generally expected, by financial variables that during decades have been the source of notorious and respected economic theories, but also affected, especially with the development and diffusion of new guidelines, by another factor in turn subdivided, as we will see, in many drivers: corporate governance. The research wants particularly to demonstrate how the leverage level of a company is also impacted by the way in which the company itself is directed, controlled, and monitored, showing repercussions also in the dividend policy. Finally, empirical analysis backing the dissertation will be able to strengthen how these corporate governance elements are not always homogeneous but change in relation to the Country in which the company manages its activities due to different economic environments, institutional differences, tax systems and governance practices; a differentiation among companies settled in common law countries will be faced to understand if the same variables impact the leverage level in the same way or differently , as expected, even if apparently they could be brought back to the same roots, traditions and managerial behaviours. The countries, analysed in order of appearance, will be: Australia, Canada, New Zealand, South Africa, UK and finally USA.