Yaiza García Padrón

Determinant factors of leverage: An empirical analysis of Spanish corporations

Purpose – To contrast the different factors that can determine the level of debt of firms by means of panel data methodology. Design/methodology/approach – The variables used in the study are: size, generated resources, level of warrants, debt cost, growth opportunities, and reputation. Six hypotheses are considered. Findings – The results obtained suggest that the stated variables, other than reputation, can be considered to be explanatory variables of firm debt level. Using within-groups estimation and generalized least squares, the results suggest that the behavior of the sample throughout the study period is consistent with the fixed effects approach, in which the specific characteristics of each firm remain constant throughout time. Moreover, with respect to the six considered hypotheses, the analysis shows the influence of all stated variables except reputation on the leverage. Originality/value – Adds to the body of research that has focused on the analysis of the financial decisions of the firm, with the level of debt appearing as a relevant factor in explaining the relationship between investment and financing decisions.

Which are the risk factors in the pricing of Personal Pension Plans in Spain

The aim of this paper is to analyse if the Arbirtrage Pricing Theory or the model suggested by Chen, Roll and Ross (1986) can efficiently explain the variability of the cross-sectional returns on the Personal Pension Plans in Spain between 1995-2003, as well as to find their sources of risks. To test both models we have followed the traditional two-step cross-sectional regressions by Fama and MacBeth (1973). The results of our analysis show two significant risk factors derived from the fixed-income market: non-anticipated changes in the interest rate term structure and the default risk premium.