International diversification, capital structure and cost of capital: evidence from ICT firms listed at NASDAQ

Authors: Aoun, Dany¹; Heshmati, Almas²

Source: Applied Financial Economics, Volume 18, Number 12, July 2008 , pp. 1021-1032(12)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

In this study, we intend to examine the information and communication technology (ICT) firms from a financial perspective. The relationship between capital structure and cost of capital (COC) is investigated in a simultaneous equation framework. On the one hand, we relate international diversification to the firm's capital structure, and on the other, we test their individual and collective inferences on the combined debt and equity COC. We expect a negative correlation between international diversification and higher total and long-term debt ratios, and a reduction in the overall COC.

Document Type: Research article

DOI: http://dx.doi.org/10.1080/09603100701335457

Affiliations: 1: Techno-Economics and Policy Program & Information Technology Policy Program, College of Engineering, Seoul National University, Seoul 151-742, Korea 2: University of Kurdistan HawlerHawler, Iraq

Publication date: 2008-07-01

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