Determinants capital structure: a theoretical meta-analysis

Abstract

This paper reports a database content review on capital structure theories in the most impactful journal on finance and business in the world - The Journal of Finance. Our focus was to comparatively assess the weight of theoretical adoption amongst the five major theories of capital structure - Modigliani and Miller, Tradeoff, Pecking Order, Market Timing and Stakeholders’ Co-investment Theories. In so doing, we performed a systematic search of articles published between 1970 and 2018, using generic and specific query terms synonymous with these theories. Our results show that the trade-off theory is the most adopted theory, followed by the market timing theory.