Corporate strategy and capital structure: An analysis of the linkages between them
Long-term capital structure decisions help determine corporate flexibility and the advancement of strategies that may be utilised in the face of external or internal pressures. Given this, capital structure decisions are a complex function, influenced by, amongst other factors, institutional structures, liquidity constraints, tax regimes, and liquidity constraints. Within this context the link between corporate strategy and capital structure becomes paramount. Accordingly, this dissertation answers three questions: first, how the decisions made in developed and developing countries differ with regard corporate financial leverage. Secondly, it addresses the implications of cultural diversity between countries upon individual policy makers within firms. Thirdly, it considers the extent to which there is a similarity between the cross-sectional variability of individual countries’ capital structures. The dissertation can be moulded to suit a range of individual countries.
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