Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


An Investigation of The Determinants of Capital Structure and The Effects of Credit Rating on Capital Structure: Evidence from A Panel Data Analysis in UK Market

Author(s): Riyad Al-Hindawi

The Objective of the study is to investigate the determinants of capital structure in the UK for the period 2012-2017 and the impact of credit rating on capital structure. The study employs a panel data of 138 firms, of which 69 are credit rated and the remaining are non-rated. The study uses a static model in order to investigate the determinants of capital structure and the effects of credit ratings on leverage. The results show that, as a category, firms with a credit rating use more debt than non-rated firms. However, within the categories, the results suggest that the level of firms’ credit ratings is negatively related to leverage.

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