The impact of liquidity on capital structure: Evidence from publicly listed industrial firms in the Philippines from 2009-2013

• Main Authors: Betonio, Mary Bernadette Joyce B., Chua, Wilbur Omar T., Galero, Sealtiel O., Santos, Kenneth S.
• Format: text
• Language: English
• Published: Animo Repository 2015
• Subjects: Liquidity (Economics); Bank liquidity > Philippines
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/6080
• Institution: De La Salle University

The study explores the effect of asset and stock liquidity to the capital structure of industrial firms in the Philippines from 2009-2013. Using data obtained from Osiris, the study employs a fixed and random effects panel regression model which validated a significant relationship between asset liquidity, stock liquidity and capital structure of firms. Results show that firms with more liquid equity still prefer debt over equity financing, while firms with more liquid assets follow the pecking-order in determining its capital. Other factors involved in the analysis are profitability, growth, firm size, non-debt tax shields, and tangibility.