An Overview: Oil and Gas Capital Structure

Abstract

The topic of capital structure has long been studied by researchers and constitutes one of the most active areas in the field of finance. Studies typically contain empirical evidence and theoretical explanation on how capital structure decisions have been driven by different determinants. However, to date, limited efforts have been devoted to the oil and gas industry even though this industry has a significant impact on economics for most of the countries in the world. Thus, it is important to draw attention to the factors that have an influence on capital structure decisions in the context of the oil and gas industry. Therefore, this study is to reviews empirical evidence that have employed firm-specific factors that generally had been accepted by researchers to be the determinants of capital structure as a way to assess such factors in understanding what motivates oil and gas firms to select a particular source of fund and to provide a significant indication which a firm has to consider before deciding on its capital structure decisions. This information is useful for researchers’ studies on oil and gas industry capital structure to underline the research direction.