The Theory of Capital Structure

Milton Harris, Artur Raviv

Research output: Contribution to journalReview articlepeer-review

1709 Scopus citations


This paper surveys capital structure theories based on agency costs, asymmetric information, product/input market interactions, and corporate control considerations (but excluding tax‐based theories). For each type of model, a brief overview of the papers surveyed and their relation to each other is provided. The central papers are described in some detail, and their results are summarized and followed by a discussion of related extensions. Each section concludes with a summary of the main implications of the models surveyed in the section. Finally, these results are collected and compared to the available evidence. Suggestions for future research are provided. 1991 The American Finance Association

Original languageEnglish (US)
Pages (from-to)297-355
Number of pages59
JournalThe Journal of Finance
Issue number1
StatePublished - Mar 1991

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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