TITLE:
The Volatility of Capital Structure in Brazil—An Empirical Analysis
AUTHORS:
António Lourenço, Fernando Reis
KEYWORDS:
Capital Structure, Debt, Determinants, Volatility, Brazil
JOURNAL NAME:
Open Journal of Business and Management,
Vol.11 No.3,
May
24,
2023
ABSTRACT: The capital structure has been studied consistently
since 1952. The volatility of the structures of capital is recent, where the static
trade-off theory is questioned, DeAngelo & Roll (2015). It followed this idea, and not only the study of determinants between
companies. The aim of this article is to answer if the Brazilian companies are
unstable in terms of structure capital and not an exception, and subsequently
identify the impact of the volatility of capital structures, profitability,
size, sector of activity, etc. 625 non-financial companies were analyzed, from
2003 to 2016, listed on the Brazilian Stock Exchange with models dynamic and
static. The results conclude that the capital structures in Brazil are
volatile, and that there was not profitability in the
companies, even though they had increased their debts.