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The Impact of Financial Markets Globalization on Companies Capital Structure

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Author Info
Mihaela DRAGOTA
Andreea SEMENESCU (Bucharest University of Economics)
Cristina BADARAU (University of Orleans)

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Abstract

Insuring the assets financing was a permanent concern in the companies. The aim of the financing policy was to identify the most profitable financing sources for the company, at the lowest cost possible and correlated in time with the need of resources. The modelling of the cost of capital, as well as that of the optimal combination of various financing sources in order to obtain a cost of capital able to lead to maximizing the companies value, especially in the conditions of a durable financing are permanent challenges for scientific research. The capital structure of the companies is determined by a wide range of quantitative and qualitative factors, which can be divided in two classes: on one side, factors independents on companies decisions (the stability of the economy, the fiscal system, the monetary and capital markets), and on the other side internal factors (the size of the company, the profitability, the percent of tangible assets in total assets etc.). The accessibility of the financing sources is in present influenced by the characteristics of the credit and capital markets are characterized in present by complex phenomena such as the globalization and the adhesion of certain countries to European Union.

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Publisher Info
Article provided by University of Craiova, Faculty of Economics and Business Administration in its journal Annals of Computational Economics.

Volume (Year): 3 (2008)
Issue (Month): 36 (May)
Pages: 1253-1259
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Handle: RePEc:aio:aucsse:v:3:y:2008:i:11:p:1253-1259

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Related research
Keywords: globalization; capital structure; financial markets; fiscal system; cost of capital.;

Find related papers by JEL classification:
L00 - Industrial Organization - - General - - - General
L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
E00 - Macroeconomics and Monetary Economics - - General - - - General
E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

References listed on IDEAS
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  1. Kiyotaki, Nobuhiro & Moore, John, 1997. "Credit Cycles," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 211-48, April.
    Other versions:
  2. Titman, Sheridan & Wessels, Roberto, 1988. " The Determinants of Capital Structure Choice," Journal of Finance, American Finance Association, vol. 43(1), pages 1-19, March. [Downloadable!] (restricted)
  3. Rafael LaPorta & Florencio Lopez de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Harvard Institute of Economic Research Working Papers 1788, Harvard - Institute of Economic Research.
    Other versions:
  4. Trezevant, Robert, 1992. " Debt Financing and Tax Status: Tests of the Substitution Effect and the Tax Exhaustion Hypothesis Using Firms' Responses to the Economic Recovery Tax Act of 1981," Journal of Finance, American Finance Association, vol. 47(4), pages 1557-68, September. [Downloadable!] (restricted)
  5. Carlstrom, Charles T & Fuerst, Timothy S, 1997. "Agency Costs, Net Worth, and Business Fluctuations: A Computable General Equilibrium Analysis," American Economic Review, American Economic Association, vol. 87(5), pages 893-910, December. [Downloadable!] (restricted)
    Other versions:
  6. Deen Kemsley & Doron Nissim, 2002. "Valuation of the Debt Tax Shield," Journal of Finance, American Finance Association, vol. 57(5), pages 2045-2073, October. [Downloadable!] (restricted)
  7. Chen, Nan-Kuang, 2001. "Bank net worth, asset prices and economic activity," Journal of Monetary Economics, Elsevier, vol. 48(2), pages 415-436, October. [Downloadable!] (restricted)
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