This study investigated one of the issues in modern finance. It attemps to identify factors that affect a firm’s capital structure under international or domestic context. However, this paper differed from past researches by using sample data in that the sample data from firms with headquarters in Chuncheong province in Korea. Morevoer, the study covers the period the post of the global financial turmoil. Three hypotheses in terms of a firm’s financial leverage were postulated and empirically tested. Using the static panel data model, the profitability, growth rate, and cash holdings of a firm were found to be statistically significant factors that influenced leverage. It was also interesting to note that firms with headquarters in North Chungcheong region showed different effect of profitability, cash holding, and foreign ownership on the debt ratios compared to their counterparts in the South sub-provincial area. The results from the study are expected to provide new insights that would enhance to robustness and consistency of empirical findings.
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