THE CAPITAL STRUCTURE AS A RESOURCE AND THE EFFECT ON PERFORMANCE OF FIRMS
http://dx.doi.org/10.5585/riae.v9i1.1661

Silvio Parodi Camilo, Wlamir Gonçalves Xavier, Rodrigo Bandeira De Mello, Rosilene Marcon

Abstract


This article aims to expand the current theoretical and empirical understanding of the capital structure as an important resource to research a firm’s performance, from a financial and strategic perspective. Empirical research on resource-based-view (RBV) has either focused on the effects of technological resources and innovative capacity or resources associated with operational efficiency. One feature deserving attention in turbulent environments, such as in Brazil, is the capital structure, as the combination of funding sources is a vital decision. Data was collected from Bovespa listed firms between 2002 and 2007. Two performance constructs were suggested and assessed; firm performance was measured through return on operational assets (ROA) and return on equity (ROE). Results provide empirical evidence that decisions concerning financial leverage (DFL) are relevant to enhance competitive advantage. This study was inconclusive regarding the capital structure’s influence on the ROA.


Keywords


Capital structure; Performance; Resource

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Iberoamerican Journal of Strategic Management  e-ISSN: 2176-0756