Back to the Beginning : Persistence and the Cross-Section of Corporate Capital Structure

  title={Back to the Beginning : Persistence and the Cross-Section of Corporate Capital Structure},
  author={Michael Lemmon and Eccles},
We examine the evolution of the cross-sectional distribution of capital structure and find that capital structure is remarkably stable over time; firms with high (low) leverage remain relatively high (low) levered for over 20 years. Additionally, this relative ranking is observed for both public and private firms, and is largely unaffected by the process of going public. These persistent differences in leverage across firms are associated with the presence of an unobserved firm specific effect… CONTINUE READING
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