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Capital structure of social purpose companies -- a panel data analysis

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  • Aleksandra Szymańska
  • Stijn Van Puyvelde
  • Marc Jegers

Abstract

This paper examines the determinants of borrowing decisions of social enterprises. Following the streams of research dealing with for-profit firms and non-profit organisations, we apply a panel data analysis of 2228 Belgian social purpose companies over the period of 2004--2013. We find that, in their capital structures, Belgian social purpose companies show a high dependence on financial determinants such as profitability, nature of assets, growth opportunities, size, the probability of agency problem and the previous year's leverage. They also demonstrate a high susceptibility to activity domain, legal form, region and evolution over time. Our results are in line with the mainstream literature on both for-profit organisations and non-profit organisations. We conclude that the capital structure of social enterprises mixes features of both research streams.

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  • Aleksandra Szymańska & Stijn Van Puyvelde & Marc Jegers, 2015. "Capital structure of social purpose companies -- a panel data analysis," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 5(4), pages 234-254, October.
    • Handle: RePEc:taf:jsustf:v:5:y:2015:i:4:p:234-254
    DOI: 10.1080/20430795.2015.1089829
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    1. Siqueira, Ana Cristina O. & Guenster, Nadja & Vanacker, Tom & Crucke, Saskia, 2018. "A longitudinal comparison of capital structure between young for-profit social and commercial enterprises," Journal of Business Venturing, Elsevier, vol. 33(2), pages 225-240.
    2. Peter Krištofík & Juraj Medzihorský & Hussam Musa, 2022. "Capital Structure and Its Determinants—A Comparison of European Top-Rated CSR and Other Companies," JRFM, MDPI, vol. 15(8), pages 1-16, July.
    3. Maria Carolina Rezende de Carvalho Ferreira & Vinicius Amorim Sobreiro & Herbert Kimura & Flavio Luiz de Moraes Barboza, 2016. "A systematic review of literature about finance and sustainability," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 6(2), pages 112-147, April.

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