The impact of corporate strategy on the capital structure of Australian companies

Abstract

Barton and Gordon (1988) identified a causal relationship between the Corporate strategy and capital structure of American firms. Naughton et al (1989) replicated and extended the basic Barton and Gordon Model for Australian firms and identified some similar relationships. This paper addresses some of First the contextual the reservations expressed in the two previous studies. variables used to examine the relationship between strategy and capital structure have been redefined and extended and include better measures of cash flow. Second the regression models applied to the data have been refined to gain a better understanding of the relationship. The result is an improved understanding of the relationship. The result is an improved understanding of the strategy/capital structure in an Australian context.