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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Article
Does Market Timing Affect Capital Structure?: Evidence for Chinese Firms
Author(s)
Philip Russel, Ken Hung
Full-Text PDF
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DOI:10.17265/1537-1506/2013.06.002
Affiliation(s)
Philip Russel, Associate Professor, Kanbar College of Design, Engineering and Commerce, School of Business Administration, Philadelphia University.
Ken Hung, Professor, Division of International Banking and Finance Studies, Texas A&M International University.
ABSTRACT
This paper investigates the market timing hypothesis of capital structure using a sample of 1,077 Chinese firms for the period 1992 to 2007. We find that market timing plays a significant role in capital structure decisions. However, market timing effects are not persistent and disappear within three years. The results suggest the prominent role played by the government in timing of security issues.
KEYWORDS
capital structure, market timing, persistence, China capital market
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