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Equity ratios of Austrian nonfinancial corporations – evidence from balance sheet data

Author

Listed:
  • Christian Beer

    (Oesterreichische Nationalbank, Economic Analysis Division)

  • Walter Waschiczek

    (Oesterreichische Nationalbank, Economic Analysis Division)

Abstract

This article analyzes the equity ratios of Austrian nonfinancial corporations using balance sheet data. According to our data, the median equity ratio is about 34%, subject to strong heterogeneity across industries. While companies with a high share of tangible assets tend to have a low equity ratio, we find hardly any link between the share of intangible assets and the equity ratio. Our results suggest that low-tech companies have a lower equity ratio than companies with a higher level of technology intensity. However, high-tech companies do not generally exhibit a higher equity ratio than medium-tech companies. The median equity ratio of start-ups is higher than the overall median equity ratio but lower than the median equity ratio of all high-tech companies. Furthermore, our data suggest that the relationship between firm size and equity ratio is not linear – up to a certain size, the equity ratio decreases with firm size. At least in part, this might be due to the public information available about firms as we find a strong relationship between opaqueness and firm size. Firm age affects the equity ratio only for the first ten years of company life.

Suggested Citation

  • Christian Beer & Walter Waschiczek, 2019. "Equity ratios of Austrian nonfinancial corporations – evidence from balance sheet data," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 19/Q3, pages 25-41.
    • Handle: RePEc:onb:oenbmp:y:2019:i:19/q3:b:2
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    References listed on IDEAS

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    More about this item

    Keywords

    corporate finance; capital structure; equity ratio;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • 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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