Spring ’21 Inspiration Lecture 5
Wednesday, April 14, 6:30PM (New Delhi)
Capital Structures in developing countries around the world: Are small firms different?
Professor Kate Phylaktis
Professor of International Finance
Director, Emerging Markets Group (EMG)
Cass Business School
City, University of London
This study uses firm level survey data to assess whether the capital structure theory is portable to small firms in developing countries and whether country characteristics play a role in their financing decisions. Using a sample of both small companies and large firms from 24 developing countries covering all regions of the world, our main results show (i) The size of the firm is an important factor in the level of leverage; (ii) Profitability has no bearing in the capital structure decisions of small firms in contrast to large firms, and thus do not follow the pecking order; (ii) The country of incorporation is an important determinant for the debt financing decisions of small firms; (iv) The financing decisions of small firms are sensitive to institutional characteristics, and the macroeconomic and financial environment variables of the country; and (v) The impact of these variables varies with the size of the firm.
About the speaker:
Kate Phylaktis is Professor of International Finance and Director of the Emerging Markets Group at Cass Business School, City, University of London. She previously held research and analyst positions at the London School of Economics and the National and Commercial Banking Group (now Royal Bank of Scotland). Kate’s main research and teaching interests are in international finance and emerging markets finance. She is also interested in the development of financial markets, the interaction of corporate governance and asset pricing, and the interaction of capital flows and corporate finance. She is the author of 45 articles published in top finance and economics journals including the Journal of Corporate Finance, Financial Management, Journal of International Money and Finance, Review of Economics and Statistics, and the Journal of Development Economics. She has authored three books including “The Banking System of Cyprus: Past, Present and Future”, (Macmillan Press 1995), a seminal book on the development of the banking system of Cyprus and was the guest editor of four special issues of the Journal of International Money and Finance on “Emerging Markets Finance” (Elsevier, 2006, 2009, 2012, 2016).
In addition to teaching and doing research Kate has been involved in policy advising, training, research and consulting projects for a number of institutions, including the International Monetary Fund, Export Guarantees Advisory Council, University of Bordeaux, the Warsaw University, Crown Agents, Commonwealth Secretariat and the Hellenic Capital Markets Commission. She has also acted as a consultant to the Ministry of Education and Religious Studies in Greece and Ministry of Education and Culture in Cyprus advising on the development of tertiary education.
Kate has set up The Emerging Markets Group (EMG) in 2001, a forum for academic research on foreign exchange and financial markets with particular reference to emerging economies. EMG through a series of workshops and conferences has established a network of internationally respected finance academics, professionals and policymakers. EMG events have had extensive financial support by the ESRC, the Journal of International Money and Finance, the ECB, IMF, EBRD, the Stock Exchange, and various banks.
Kate has served as an Associate Editor of the Journal of International Money and Finance (2002- 2013), International Journal of Financial Analysis (2013-), Emerging Markets Review (2002-present), Pacific-Basin Finance Journal (2006-present), Financial Review (2004-2010), Multinational Finance Journal (2002-2008), Greek Economic Review (2002-2008) and Ekonomia (2000-2014).
Moderator: Dr. Aghila Sasidharan, Assistant Professor, JGBS