The Persistent Puzzle of Corporate Capital Structure: Current Challenges and New Directions


  • This paper is the text of the Keynote Address delivered at the Eastern Finance Association's 2012 Annual Meeting in Boston. I am grateful for the helpful comments received from Diane Denis.

Katz Graduate School of Business Administration, University of Pittsburgh, Pittsburgh, PA 15260; Phone: (412) 648-1708; E-mail:


This paper is the keynote address from the Eastern Finance Association's 2012 meeting in Boston. I assert that, despite a substantial amount of work and much progress in the capital structure field, traditional models do a remarkably poor job of explaining the dynamics of observed capital structures. New approaches that focus on the firm's intertemporal access to capital appear to represent the most promising avenues for yielding fresh insights.