Causes and Effects of Financial Structure

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Chanisa Maneerattanarungrot
Kwunkamol Donkwa


Studies on financial structure have been available for years, but the research results about its causes and effects are not definitive. Most studies analyzed either its causes or its effects and used a single indicator as a proxy for the financial structure. This study aims to explore how the firm characteristics affect the financial structure and how the financial structure affects the firm value. The financial structure is measured from the total debt ratio, long-term debt ratio, short-term debt ratio, and debt to equity ratio by using the confirmatory factor analysis technique. The firm value is measured from market value of total assets and free cash flow. The causal relationships are analyzed with the structural equation modelling technique. The financial data for four accounting periods from 2011 to 2014 of 315 firms listed on the Stock Exchange of Thailand are analyzed. This study finds tangibility positively affects the financial structure, but liquidity negatively affects the financial structure. Moreover, the financial structure has the positive effect on the firm value measured from market value of total assets. These findings will fill the gap of knowledge of the mediating role of financial structure of the listed firms in the Stock Exchange of Thailand.


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Maneerattanarungrot, C., & Donkwa, K. (2018). Causes and Effects of Financial Structure. WMS Journal of Management, 7(3), 1-14. Retrieved from
Research Articles-Academic Articles
Author Biographies

Chanisa Maneerattanarungrot

Doctor of Philosophy Program in Management, Suranaree University of Technology

Kwunkamol Donkwa

School of Management Technology, Institution of Social Technology, Suranaree University of Technology


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