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Is the Negative Relation Between Leverage and Historical Market-To-Book Specific to US and Information and Communication Technology Firms?


  • *We gratefully acknowledge useful comments of Jan Marc Berk, Jaap Bos, Tijs de Bie, Peter van Els, Jakob de Haan, Jim Kolari, Clemens Kool, participants of the 60th International Atlantic Economic Conference (New York), the 34th Eurobanking Conference (Dubrovnik), the 2007 Erasmus Finance Day (Rotterdam), seminars at ABN-Amrobank, Free University, De Nederlandsche Bank, and Rabobank, as well as an anonymous referee.

Leo de Haan
De Nederlandsche Bank
Economics and Research Division
P.O. Box 98
1000 AB Amsterdam, The Netherlands


This paper examines the relationship between corporate capital structures and historical market-to-book ratios using panel data for US, UK, and continental European firms for the period 1991–2001. We confirm the negative effect on leverage found for the United States, but find that this effect is weak for the United Kingdom and continental Europe and moreover specific to information and communication technology (ICT) firms and the ICT boom episode in continental Europe.