Capital structures in developing countries

This study uses a new data set to assess whether capital structure theory i s portable across countries with different institutional structures. We ana lyze capital structure choices of firms in 10 developing countries, and pro vide evidence that these decisions are affected by the same variables as in developed countries. However, there are persistent differences across coun tries, indicating that specific country factors are at work. Our findings s uggest that although some of the insights from modern finance theory are po rtable across countries, much remains to be done to understand the impact o f different institutional features on capital structure choices.