This study uses a new data set to assess whether capital structure theory is portable
across countries with different institutional structures. We analyze capital structure
choices of firms in 10 developing countries, and provide evidence that these decisions
are affected by the same variables as in developed countries. However, there are
persistent differences across countries, indicating that specific country factors
are at work. Our findings suggest that although some of the insights from modern
finance theory are portable across countries, much remains to be done to understand
the impact of different institutional features on capital structure choices.