| The virtual meaning of the capital structure has not been really understood until Modigliania and Miller published the Theory of Capital Structure in 1958. However, with the development of economy such as economics globalization and capitalization, the theory of capital structure is becoming more and more complicated. Among them, the analysis on capital structure of multinational corporation has been paid attention to widely.Previous theories on capital structure of multinational corporation paid more attention to analyze the capital structure of American firms. Until 1970's, with the development of Japanese and European multinational corporations, many scholars began to analyze the capital structure of Japanese and European multinational corporations. With the development of multinational corporations in developing countries, multinational business has become a global trend. Scholars from western countries try to set up a theory that fits any counties. However, for developing countries, the status of economics has changed constantly; the conditions for multinational corporations are changing. It is impossible to set up a theory that can be used by all the countries.The paper chooses the two samples of Korean multinational corporations which go into the continent market and domestic company then process the paired-sample T test, then analyzes intensively the determinants of multinationals' capital structure. Based on trade-off model we analyze the system how decides the capital structure of the multinational corporations and which element influence the capital structure.The result of the test proves that the liability level of the multinational corporations is higher than that of the domestic corporations. The reason is multinational corporations have monopoly advantage, internalization advantage and ownership advantage, they have lower expected bankruptcy risk, higher capacity of avoiding international taxes, so they can afford a high level of liability. |
PDF Full Text Request