| Summary: | 碩士 === 國立成功大學 === 國際企業研究所碩博士班 === 97 === The issue of capital structure has become a popular topic after Modigliani and Miller’s (1958) capital structure irrelevance theory was proposed. Later on, the trade-off theory and the pecking order theory were brought up sequentially. Additionally, more and more scholars tried to investigate the determinants of capital structure. Most of the studies can be divided into two parts: (1) the comparison between multinational corporations (MNCs) and domestic corporations (DCs) in one nation (2) examination from one or more countries without distinguishing MNCs from DCs.
However, business groups play an important role in Taiwan’s business environment. When comparing the annual revenues of the top 100 business groups using the yearly GNP, the ratio of revenues of business groups to GNP reached 137.57% in 2004 according to the China Credit Information Service (CCIS). Therefore, this study intends to examine not only the differences but also the determinants of capital structure between business and non-business groups, using data from Taiwan’s electronics industry.
We performed the Multicollinearity Test, the Nested Hypothesis Test and the Autocorrelation Test by OLS. The empirical results are as follows:
(1) Business group firms leverage more than non-business group firms.
(2) Firms with higher non-debt tax shields leverage more in both of the two groups.
(3) Firms with higher profitability leverage less in both of the two groups.
(4) Firms with more growth opportunities leverage more in both of the two groups.
(5) Firms with higher collateral value of assets leverage less in business group firms, while they leverage more in non-business group firms.
(6) The larger the number of subsidiaries, the lower the debt ratio in business groups.
(7) Firms with more growth opportunities leverage more in business groups than in non-business groups.
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