Abstract
The importance of a number of agency costs of debt and equity which affect capital structure choice differs between listed and non-listed firms. It follows that there should be differences in the capital structure choices and the relationships between debt levels and the explanatory variables commonly employed in empirical capital structure studies between listed and non-listed firms. This paper investigates the capital structure choices of non-listed firms in Sweden over the period 1997-1999 and later compares it to that of listed firms. I find a number of differences in the capital structure of listed and non-listed firms, as well as differences both in the relationship of debt levels to the explanatory variables employed in most capital structure studies between listed and non-listed firms and in the magnitude of the effect of the variables. This supports the expectation of differences based on listed and non-listed firm differences in the agency costs of debt and equity. Of the most important influences on capital structure, tangibility is common to both listed and non-listed firms. If one makes the assumption that firms with a large proportion of tangible assets in their asset structure are the more mature firms, this would point to the fact that for both listed and non-listed firms, growth options are a major determinant of capital structure choice. This would validate the claim by Barclay and Smith (1996) that a firm’s investment opportunity set is the primary determinant of its capital structure.