Understanding corporate debt from the oil market perspective

Paresh Kumar Narayan, Maryam Akbari Nasiri

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)


We design and test the hypothesis that for energy firms' oil market activities impact capital structure. Using a unique sample of 726 energy firms from 56 countries, we find that oil market activities do influence capital structure. The speed of adjustment (SOA) to leverage when not exposed to oil market activities is between 27.5 and 66.4%. When exposed to oil price growth (market liquidity) the corresponding SOA is between 51.1 and 72.4% (40.9–76.1%). We conclude that oil price growth slows down while market liquidity improves SOA to leverage for energy firms. By comparison, using a sample of over 32,000 non-energy firms from 108 countries, we find no evidence that oil market activities dictate capital structure.

Original languageEnglish
Article number104946
Number of pages10
JournalEnergy Economics
Publication statusPublished - Oct 2020
Externally publishedYes


  • Capital structure
  • Energy firms
  • Leverage
  • Oil prices
  • Speed of adjustment

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