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The Effect Of Industry And Firm’S Ownership On Capital Structure Of Firms In Bosnia And Herzegovina

Author

Listed:
  • Azra Bajramovic

    (Dzemal Bijedic University of Mostar, Bosnia and Herzegovina)

Abstract

This paper examines the effect of industry and firm ownership on capital structure of firms in Bosnia and Herzegovina. Since most of the studies for developed and other transition economies explore the effect of different determinants on capital structure through firms’ leverage, that approach was used in this study too. Data on firms listed in two stock exchanges were obtained for the period of 2011-2015. Effects of industry and ownership on firm’s leverage were tested through the use of ANOVA and t-test. The results indicate differences in significance of industry and firm’s ownership for the firms listed in Sarajevo and Banja Luka Stock Exchange. For firms listed in BLSE industry effects have proven to be statistically significant where manufacturing firms have higher leverage while firms in water supply, electricity, gas supply industry have lower leverage. The results also show that privately owned firms will have higher leverage compared to state owned firms.

Suggested Citation

  • Azra Bajramovic, 2016. "The Effect Of Industry And Firm’S Ownership On Capital Structure Of Firms In Bosnia And Herzegovina," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 4(4), pages 1-7.
    • Handle: RePEc:ejn:ejefjr:v:4:y:2016:i:4:p:1-7
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    References listed on IDEAS

    as
    1. Bradley, Michael & Jarrell, Gregg A & Kim, E Han, 1984. "On the Existence of an Optimal Capital Structure: Theory and Evidence," Journal of Finance, American Finance Association, vol. 39(3), pages 857-878, July.
    2. repec:bla:jfinan:v:43:y:1988:i:1:p:1-19 is not listed on IDEAS
    3. Sasho Arsov & Aleksandar Naumoski, 2016. "Determinants of capital structure: An empirical study of companies from selected post-transition economies," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 34(1), pages 119-146.
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