High debt companies' leverage determinants in Spain: A quantile regression approach

With a severe debt overhang problem in Spain, either public or private, the analysis of the factors that influence companies' leverage in this country reveals essential, in particular for the high-indebted firms. This study benefits from the quantile regression approach advantages over the OLS method to analyze the leverage determinants for a large sample of companies for the 2001-2011 period depending on their level of indebtedness. This method reveals that for the highly-leveraged companies many factors are no longer significant and that cash flow variable is crucial if the companies would like to decrease their debt levels. (C) 2013 Elsevier B.V. All rights reserved.