MACROECONOMIC VARIABLES AND CAPITAL STRUCTURE: PUBLIC FINANCE AND INSURANCE IN LATIN AMERICA AND ASIA

Abstract

This article analyzes the relationship between macroeconomic variables and the capital structure of public finance and insurance companies in Latin America and Asia. The variables used were: Gross Domestic Product (GDP), Exchange Rate (ER), Interest Rate (%Δ IR), and Capital Structure (CS). Data were analyzed annually from 2010 to 2018 by static panel analysis and multiple regression using the Newey-West estimator. Interest rate and exchange rate were negatively correlated with CS. However, GDP was not significantly correlated with CS at 10% probability. It is concluded that macroeconomics interferes with the capital structure of financial institutions in Latin America and Asia.