Understanding corporate debt from the oil market perspective

We design and test the hypothesis that for energy firms' oil market activities impact capital structure. Using a unique sample of 726 energy firms from 56 countries, we find that oil market activities do influence capital structure. The speed of adjustment (SOA) to leverage when not exposed to...

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Detalles Bibliográficos
Autores principales: Narayan, Paresh Kumar, Nasiri, Maryam Akbari
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier B.V. 2020
Materias:
Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7502032/
https://www.ncbi.nlm.nih.gov/pubmed/32981989
http://dx.doi.org/10.1016/j.eneco.2020.104946
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author Narayan, Paresh Kumar
Nasiri, Maryam Akbari
author_facet Narayan, Paresh Kumar
Nasiri, Maryam Akbari
author_sort Narayan, Paresh Kumar
collection PubMed
description We design and test the hypothesis that for energy firms' oil market activities impact capital structure. Using a unique sample of 726 energy firms from 56 countries, we find that oil market activities do influence capital structure. The speed of adjustment (SOA) to leverage when not exposed to oil market activities is between 27.5 and 66.4%. When exposed to oil price growth (market liquidity) the corresponding SOA is between 51.1 and 72.4% (40.9–76.1%). We conclude that oil price growth slows down while market liquidity improves SOA to leverage for energy firms. By comparison, using a sample of over 32,000 non-energy firms from 108 countries, we find no evidence that oil market activities dictate capital structure.
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spelling pubmed-75020322020-09-21 Understanding corporate debt from the oil market perspective Narayan, Paresh Kumar Nasiri, Maryam Akbari Energy Econ Article We design and test the hypothesis that for energy firms' oil market activities impact capital structure. Using a unique sample of 726 energy firms from 56 countries, we find that oil market activities do influence capital structure. The speed of adjustment (SOA) to leverage when not exposed to oil market activities is between 27.5 and 66.4%. When exposed to oil price growth (market liquidity) the corresponding SOA is between 51.1 and 72.4% (40.9–76.1%). We conclude that oil price growth slows down while market liquidity improves SOA to leverage for energy firms. By comparison, using a sample of over 32,000 non-energy firms from 108 countries, we find no evidence that oil market activities dictate capital structure. Elsevier B.V. 2020-10 2020-09-20 /pmc/articles/PMC7502032/ /pubmed/32981989 http://dx.doi.org/10.1016/j.eneco.2020.104946 Text en © 2020 Elsevier B.V. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Narayan, Paresh Kumar
Nasiri, Maryam Akbari
Understanding corporate debt from the oil market perspective
title Understanding corporate debt from the oil market perspective
title_full Understanding corporate debt from the oil market perspective
title_fullStr Understanding corporate debt from the oil market perspective
title_full_unstemmed Understanding corporate debt from the oil market perspective
title_short Understanding corporate debt from the oil market perspective
title_sort understanding corporate debt from the oil market perspective
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7502032/
https://www.ncbi.nlm.nih.gov/pubmed/32981989
http://dx.doi.org/10.1016/j.eneco.2020.104946
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