A review of capital structure theory using a bibliometric analysis

Abstract

Author citation and co-citation analysis is a simple, yet powerful educational tool for detecting the most relevant papers from any research field. I demonstrate its use and graphically show a chronological development of capital structure theory, which highlights the most important contributions. I then systematically present the capital structure theory, starting with Modigliani & Miller's irrelevance theorem, and continue with four alternative explanations of firm capital structure behaviour. This paper is particularly useful for PhD students and junior researchers who need to familiarize with the literature of their own research field, and for those, interested in the up-to-date review on capital structure theory.