The Influence of the Financial System on the Puzzle of Corporate Financing Decisions: Review

The main purpose of this study is to conduct a literature review on the influence of country-specific characteristics of financial systems on corporate financing decisions, to help complete the complex puzzle on the problematic of capital structure theories. Recently, several international studies have analysed the convergence of firms’ financing decisions according to countries’ financial system, but, in terms of literature review, it becomes necessary to establish the interconnection between the explanatory theories of capital structure and empirical studies in explaining the financing behaviour of firms in different countries. Following this, the methodology of this paper was based on summarizing the empirical literature in a non-systematic way, verifying in several international studies that the capital structure is influenced by the specific characteristics of the country’s financial system, in which the efficiency of the function of financial intermediaries contributes to reducing transaction and information costs, helping to complete the understanding about the similarities and differences in the financing choices of firms in different countries.