This journal is licensed by a Creative Commons Attribution License (CC BY-NC-SA 4.0) Attribution-Non Commercial 4.0 International. For the CC licenses, the principle isthe creative freedom. This system complements the copyright without opposing it, conscious of its importance in our culture. The content of the articles is the responsibility of each author, and does not compromise in any way, to the journal or the university. It allows the transmission and reproduction of titles, abstracts and full content, with academic, scientific, cultural ends, provided acknowledgment of the respective source. This work cannot be used for commercial purposes.
They journal does not charge authors for submission or publication.
Abstract
This paper aims to explain the effect of financial instability on the capital structure of firms in two emerging markets: Colombia and Argentina. For the analysis, the study uses an unbalanced panel dataset with 167 companies, with quarterly data between 2005 and 2015, and regressions with the random-effects method. The results show that lower liquidity level and losses during two or more consecutive quarters increase the level of leverage in companies; there- fore, signs of financial insolvency lead firms to become over-indebted and to reproduce the same conditions that lead to the emergence of a financial crisis.
![](/plugins/themes/oldGregg/images/logos/iThenticate.png)
References
Assenmacher-Wesche, K. y Gerlach, S. (2008, 09 24). Financial structure and the impact of monetary policy on asset prices. Recuperado de http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/year/2013/docId/5830
Baker, M. y Wurgler, J. (2002). Market timing and capital structure. The Journal of Finance, 57(1), 1-32.
Bernanke, B. S., Gertler, M. y Gilchrist, S. (1999). The financial accelerator in quantitative business cycle framework. Handbook of Macroeconomics, 1, 1341-1393.
Céspedes, J., González, M. y Molina, C. (2010). Ownership and capital structure in Latin America. Journal of Business Research, 63(3), 248-254.
Leland, H. (1994). Corporate debt value, bond covenants, and optimal capital structure. The Journal of Finance, 49(4), 1213-1252.
Foley, D. K. (2003). Financial fragility in developing economies. Recuperado de http://joseluisoreiro.com.br/site/link/bc6dcd99253e572c9e18e8a46bc30eb803a3314b.pdf
Kraus, A. y Litzenberger, R. H. (1973). A State-Preference Model of Optimal Financial Leverage. Recuperado de https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.1973.tb01415.x
Leland, H. y Toft, K. (1996). Optimal capital structure, endogenous bankruptcy, and the term structure of credit spreads. The Journal of Finance, 51 (3), 987-1019.
Miller, M. (1977). Debt and Taxes. The Journal of Finance, 32(2), 261-275.
Minsky, H. (1982). Can't it happend again: essays on instability and finance. Armonk: M.E Sharpe.
Modigliani, F. y Miller, M. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261-297.
Modigliani, F. y Miller, M. (1963). Corporate income taxes and the cost of capital: A correction. The American Economic Review, 53(3), 433-443.
Moore, T, Han, Y. y Clayton, R. (2012). The postmodern Ponzi scheme: Empirical analysis of high-yield investment programs. International Conference on financial cryptography and data security, 7397, 41-56. Berlín: Springer.
Myers, S. (1984). The capital structure puzzle. The Journal of Finance, 39(3), 574-592.
Myers, S. y Majluf, N. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-221.
Niu, X. (2008). Theoretical and practical review of capital structure and its determinants. International Journal of Business and Management, 3(3), 133-139.
Rajan, R. y Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. The Journal of Finance, 50(5), 1421-1460.
Revista Dinero (2015, 12 de junio). Crecimiento económico: cuáles sectores ganan, pierden y quedan igual. Recuperado de www.dinero.com: http://www.dinero.com/economia/articulo/crecimiento-del-producto-interno-bruto-colombia-primer-trimestre-2015/209538
Rodríguez, J. y Moreno, A. (2011). Fragilidad financiera de las firmas en Colombia, 2000-2006: un análisis discriminante de un modelo Minskiano. Bogotá: Universidad Nacional de Colombia.
Tenjo, F., López, E. y Zamudio, N. (2006). Determinantes de la estructura de capital de las empresas (1996-2002). Borradores de Economía, 380, 1-38.
Virgen, V. y Rivera, J. (2012). Condiciones financieras que impactan la estructura financiera de la industria de cosméticos y aseo en Colombia. Cuadernos de Administración, 25(44), 175-191.