Introduction

Abstract

Titman’s (1984) seminal contribution led to two streams of research by widening the boundaries of the firm and incorporating stakeholder liquidation costs into the firm’s capital structure choice. The first stream of reseach investigates the relations between the capital structure choice and characteristics of the firm’s products and the market where it operates, respectively (see, e.g., Maksimovic and Titman (1991), Franck and Huyghebaert (2006), Istaitieh and Rodriguez-Fernandez (2006), Kale and Shahrur (2007) and Parsons and Titman (2007)).