Firm and industry specific determinants of capital structure: Evidence from the Australian market

We demonstrate the importance of firm-specific and industry-specific factors in the leverage decision on a sample of Australian publicly listed companies from 1999 to 2012. Empirical findings show that some firm-specific factors vary across industries, whereas, several previous studies find an equal impact of these factors. In addition, we find that industry-specific factors have direct and indirect impacts on the formation of the capital structure of Australian firms, but the results of some industry-specific factors are subject to the choices of leverage ratios. Overall, we conclude that industry-specific factors are important in terms of corporate capital structure formation.