Skip Navigation Oxford Journals * Contact Us * My Basket * My Account Review of Financial Studies * About This Journal * Contact This Journal * Subscriptions * View Current Issue (Volume 24 Issue 1 January 2011) * Archive * Search * Oxford Journals * Social Sciences * Review of Financial Studies * Volume19, Issue1 * Pp. 45-79. Does the Source of Capital Affect Capital Structure? 1. Michael Faulkender 1. Washington University in St. Louis 1. Mitchell A. Petersen 1. Northwestern University and NBER 1. Address correspondence to: Mitchell Petersen, 2001 Sheridan Road, Evanston, IL 60208. E-mail: mpetersen{at}kellogg.northwestern.edu. Abstract Prior work on leverage implicitly assumes capital availability depends solely on firm characteristics. However, market frictions that make capital structure relevant may also be associated with a firm’s source of capital. Examining this intuition, we find firms that have access to the public bond markets, as measured by having a debt rating, have significantly more leverage. Although firms with a rating are fundamentally different, these differences do not explain our findings. Even after controlling for firm characteristics that determine observed capital structure, and instrumenting for the possible endogeneity of having a rating, firms with access have 35% more debt. * © The Author 2005. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org. « Previous | Next Article »Table of Contents This Article 1. Rev. Financ. Stud. (Spring 2006) 19 (1): 45-79. doi: 10.1093/rfs/hhj003 First published online: October 28, 2005 1. » AbstractFree 2. Full Text (HTML)Free 3. Full Text (PDF)Free 4. All Versions of this Article: 1. hhj003v1 2. 19/1/45 most recent Classifications 1. + Article Services 1. Email this article 2. Alert me when cited 3. Alert me if corrected 4. Find similar articles 5. Similar articles in Web of Science 6. Add to my archive 7. Download citation 8. Request Permissions Citing Articles 1. Load citing article information 2. Citing articles via CrossRef 3. Citing articles via Scopus 4. Citing articles via Web of Science 5. Citing articles via Google Scholar Google Scholar 1. Articles by Faulkender, M. 2. Articles by Petersen, M. A. 3. Search for related content Related Content 1. G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure 2. Load related web page information Share 1. + Add to CiteULike CiteULike + Add to Connotea Connotea + Add to Del.icio.us Del.icio.us + Add to Facebook Facebook + Add to Twitter Twitter What's this? Current Issue 1. January 2011 24 (1) 1. Cover Image 1. Alert me to new issues * Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department. Online ISSN 1465-7368 - Print ISSN 0893-9454 Copyright © 2011 Society for Financial Studies Oxford Journals Oxford University Press * Site Map * Privacy Policy * Frequently Asked Questions Other Oxford University Press sites: [Oxford University Press.........] Go