Abstract
The current study investigates the impact of corporate financial
decisions on peer firms’ financial decisions. The current study utilized
two sets of independent variables which are firm specific
characteristics and peer firms’ specific characteristics (profitability,
market-to-book valuetangibility and firm size). In order to address
correlated effects the study used two macroeconomic factors which are
interest rate and stock market return. GMM model for panel regression
analysis was used for encountering probable endogeneity problem in
independent variable. The results of the study confirmed the impact of
peers’ financial decisions while determining one’s own capital
structure.
Muhammad Mudassar Anwar, Arshad Hassan, Filza Hameed. (2019) Peer Effect in Firms’ Financial Decision Making: Evidence from Corporate Capital Structure , Journal of Managerial Sciences, Volume 13, special.
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