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The Factors of the Capital Structure in Eastern Europe

Author

Listed:
  • Paul Gabriel MICLAUS
  • Radu LUPU
  • Stefan UNGUREANU

    (Academy of Economic Studies)

Abstract

The paper proposes a test of the extent to which the financial indicators of the companies listed on the stock exchanges in Romania, Poland, Hungary and Czech Republic and representing four sectors of activity - Food, Chemistry, Energy and Farmaceuticals - influence the debt ratios of these companies. We use linear regression and principal components analysis in order to test for the influence of 12 different financial indicators in each of the years from 2002 until 2006. The results show that there is evidence in support of the influence of the proposed factors because the coefficients are significant and maintain their signs in all the years of our analysis.

Suggested Citation

  • Paul Gabriel MICLAUS & Radu LUPU & Stefan UNGUREANU, 2008. "The Factors of the Capital Structure in Eastern Europe," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(36), pages 432-443, May.
  • Handle: RePEc:aio:aucsse:v:1:y:2008:i:11:p:432-443
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    File URL: http://feaa.ucv.ro/AUCSSE/0036v1-026.pdf
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    References listed on IDEAS

    as
    1. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, pages 323-329.
    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.
    3. Frank, Murray Z. & Goyal, Vidhan K., 2003. "Testing the pecking order theory of capital structure," Journal of Financial Economics, Elsevier, vol. 67(2), pages 217-248, February.
    4. DeAngelo, Harry & Masulis, Ronald W., 1980. "Optimal capital structure under corporate and personal taxation," Journal of Financial Economics, Elsevier, vol. 8(1), pages 3-29, March.
    5. Choe, Hyuk & Masulis, Ronald W. & Nanda, Vikram, 1993. "Common stock offerings across the business cycle : Theory and evidence," Journal of Empirical Finance, Elsevier, pages 3-31.
    6. Titman, Sheridan, 1984. "The effect of capital structure on a firm's liquidation decision," Journal of Financial Economics, Elsevier, vol. 13(1), pages 137-151, March.
    7. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    8. Michael Faulkender & Mitchell A. Petersen, 2006. "Does the Source of Capital Affect Capital Structure?," Review of Financial Studies, Society for Financial Studies, vol. 19(1), pages 45-79.
    9. Shane A. Corwin, 2003. "The Determinants of Underpricing for Seasoned Equity Offers," Journal of Finance, American Finance Association, vol. 58(5), pages 2249-2279, October.
    10. Fischer, Edwin O & Heinkel, Robert & Zechner, Josef, 1989. " Dynamic Capital Structure Choice: Theory and Tests," Journal of Finance, American Finance Association, vol. 44(1), pages 19-40, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    leverage ratio; principal components analysis; financial indicators; capital markets; Eastern Europe.;

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G00 - Financial Economics - - General - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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