The Determinants of Capital Structure: Evidence from Canada

Corporate capital structure is examined in this paper with a panel of 960 observations from 60 Canadian companies in a period from 2001 to 2016. The OLS regression analysis was applied to show the substantial influence of estimated variables, namely, profitability, tangibility, firm size and growth opportunity, on changes in book leverage and market leverage. The effects of financial economic crisis in 2008 were studied. By comparison between two segmented results (before 2008 and in/after 2008), growth opportunity became more substantial while firm size became irrelevant. The effect of heteroscedasticity to the research results is examined at the end by Robust Least Square method. The comparison confirmed that heteroscedasticity is not a serious problem for this research.