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Determinants of Capital Structure: Empirical Evidence from the Czech Republic

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  • Patrik Bauer

Abstract

This paper analyses determinants of capital structure of listed companies in the Czech Republic during the period from 2000 to 2001. In general, leverage of Czech listed firms is relatively low if measured in book value, but it is relatively high if measured in market value. According to our results, leverage of a firm is positively correlated with size and it is negatively correlated with profitability and tangibility. There is the negative relationship between leverage measured in market value and growth opportunities. Moreover, leverage is positively correlated with tax and negatively correlated with non-debt tax shields, albeit on a lower level of statistical significance. This study also provides evidence concerning the relationship between leverage and industry classification.

Suggested Citation

  • Patrik Bauer, 2004. "Determinants of Capital Structure: Empirical Evidence from the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 54(1-2), pages 2-21, January.
    • Handle: RePEc:fau:fauart:v:54:y:2004:i:1-2:p:2-21
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    Keywords

    determinants of capital structure; extent of leverage; listed companies in the Czech Republic;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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