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The Influence Of Corporate Specific Factors Upon Financing Decisions

Author

Listed:
  • Lacatus Viorel-Dorin

    (Faculty of Economics and Business Administration,,)

  • Vaidean Viorela-Ligia

    (Faculty of Economics and Business Administration,,)

  • Cuceu Ionut-Constantin

    (Faculty of Economics and Business Administration,,)

Abstract

The purpose of this paper is to analyze the existing theories for the capital structure of a corporation and to determine the factors that influence the financing decisions of Romanian corporations. The gearing ratios vary a lot among Romanian corporations pointing out the fact that the internal specific factors are the ones with a greater impact upon their capital structure, and not the external factors. Our empiric research evaluates the determining factors for the debt ratio (total debt/total assets) of some Romanian corporations, focusing on its explanatory variables by including them within simple and multiple econometric models. The panel data indicators computed for the companies in the Cluj area listed on the Bucharest Stock Exchange were evaluated with the OLS and FEM techniques.The results have been interpreted, pointing out that company size and asset turnover seem to have a positive influence upon the debt ratio of selected companies, while profitability and liquidity seem to influence the debt ratio of selected companies negatively.

Suggested Citation

  • Lacatus Viorel-Dorin & Vaidean Viorela-Ligia & Cuceu Ionut-Constantin, 2013. "The Influence Of Corporate Specific Factors Upon Financing Decisions," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 1010-1017, July.
    • Handle: RePEc:ora:journl:v:1:y:2013:i:1:p:1010-1017
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    File URL: http://anale.steconomiceuoradea.ro/volume/2013/n1/106.pdf
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    References listed on IDEAS

    as
    1. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    2. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
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    More about this item

    Keywords

    capital structure; debt ratio; theories of capital structure; determinants of capital structure; empirical data;
    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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