The Impact of Product Warranties on the Capital Structure of Australian Firms

26 Pages Posted: 16 Aug 2011 Last revised: 30 Nov 2011

See all articles by Bayan M. Arqawi

Bayan M. Arqawi

Birzeit University

William J. Bertin

Bond University - Faculty of Business, Technology and Sustainable Development

Laurie Prather

Bond University - Faculty of Business, Technology and Sustainable Development

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Date Written: November 30, 2011

Abstract

This paper examines the impact of Australian firms. warranty policies on their capital structures. The sample consists of 261 firms and 937 firm-years for Australian public firms for the period 2007-2010. The results suggest that warranty policies impact on Australian firms. capital structures. Consistent with earlier Australian studies, size and asset tangibility are positively related to leverage; growth and profitability are negatively related to leverage; and earnings volatility and industry concentration are unrelated to leverage. In addition to these previously identified relationships, the firms. warranty policies have a negative impact on leverage.

Keywords: warranties, capital structure, leverage

JEL Classification: G22, G32

Suggested Citation

Arqawi, Bayan M. and Bertin, William J. and Prather, Laurie, The Impact of Product Warranties on the Capital Structure of Australian Firms (November 30, 2011). 24th Australasian Finance and Banking Conference 2011 Paper, Available at SSRN: https://ssrn.com/abstract=1910442 or http://dx.doi.org/10.2139/ssrn.1910442

Bayan M. Arqawi

Birzeit University ( email )

Ramallah
Palestine

William J. Bertin

Bond University - Faculty of Business, Technology and Sustainable Development ( email )

Gold Coast, QLD 4229
Australia

Laurie Prather (Contact Author)

Bond University - Faculty of Business, Technology and Sustainable Development ( email )

Gold Coast, QLD 4229
Australia

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