Capital Structure Determinants Across Industries: Evidence from the Swedish Market

Abstract

Using a panel dataset of 6,000 Swedish firm from 2018-2023 and a fixed effects and random effects models with interaction terms to capture industry differences, this paper investigates whether traditional capital structure determinants such as size, profitability, asset tangibility, liquidity, and non-debt tax shields affect firms differently across sectors in Sweden. Little is known about how the determinants influence varies by industry, while they are widely studied from a holistic perspective. Unlike prior studies focusing on single sectors, or the market as a whole, our comparative approach highlights cross-sectoral differences. We find somewhat limited differences between industries, differing from previous literature. We contribute by offering evidence from the Swedish market that the impact of these determinants is not uniform but partly shaped by industry-specific characteristics.