The impacts of industry-specific factors and country-level characteristics on corporate financing decisions - Evidences from Asian countries

The present study re-examined corporate financing choices in terms of either pecking order or tradeoff predictions and compared the leverage over industries and across countries. Data was drawn from the database of Compustat in nine Asian countries, including Hong Kong, India, Japan, Korea, Malaysia, Philippines, Singapore, Thailand and Taiwan. The financing decisions of firms across Asian countries did not seem to support pecking order at all owing to the highly developing financial markets. Firms had alternative choices to finance from the capital market. The empirical findings had shown that tradeoff prediction of financing decisions was more tenable across Asian countries. Besides, our findings evidence that there were some country level factors had a significant effect on firmsʹ leverage, such as anti-director right and law enforcement.