Determinants of economies of scale in large businesses a. The purpose of this paper is to determine whether capital structure determinants in transitional cee countries support traditional capital structure. The determinants of the capital structure of listed on. Sasho arsov, aleksandar naumoski determinants of capital structure. Journal of multinational financial management, 144, 387405. Pdf this study examines the factors which affect the capital structure of 608 nonfinancial firms in vietnam during the period 20092017. The determinants of firms leverage followed modified pecking order.
The determinants of capital structure in emerging capital. Determinants of organizational structure organizational. Request pdf the determinants of capital structure in transitional economies this study investigates whether capital structure determinants in emerging. The dynamics of capital structure in transition economies. This paper uses a dynamic unrestricted capital structure model to examine the determinants of the private companies target financial leverage and the. Introduction study of the capital structure and the effects of financial leverage in the socalled transition economies is still a matter of current interest.
Among others, dow jones addressed this demand and has developed their proprietary screening methodologies to identify shariah compliant firms sc. One key factor that distinguishes sc firms from their non compliant peers snc is that the former is not. Determinants of capital structure evidence from shariah. Firm, country and macroeconomic determinants of capital. The determinants of capital structure in emerging capital markets. An empirical study of companies from selected post transition economies zbornik radova ekonomskog fakulteta u rijeci, casopis za ekonomsku teoriju i praksu proceedings of rijeka faculty of economics, journal of economics and business, vol. In their study of capital structure in the g7 economies, rajan and zingales 1995 find gearing in the uk to be positively related to tangibility the. The macrofinancial environment in which the cee countries capital markets function is typical for countries moving from centrally planned to marketoriented economies. We explicitly model the adjustment of companies leverage to a target leverage, and this target leverage is itself explained by a set of. The determinants of capital structure in transitional economies.
Determinants of the capital structure of tsl sector. An empirical study of companies from selected post transition economies june 2016 zbornik radova ekonomskog fakulteta u rijeci proceedings of rijeka school of. In section 1 the most prominent theoretical and empirical findings are surveyed. Most of the empirical studies about capital structure tend to focus either on overall developed markets or on emerging countries. Huang and tao 2010 found that economic structure in china su ers from serious distortions in labor, capital, land, energy, and the environment. The entrance of these emerging economies into the world marketplace brings increased relevance to knowing whether present capital structure theories work in this unique transitional environment. Request pdf firm, country and macroeconomic determinants of capital structure.
Capital structure, leverage, transition economies, emerging market, liquidity. Furthermore identifying the determinants of capital structure also can help investors and managers of firm as it will provide better understanding of the firm capital structures strategy by considering companies characteristics in order. The determinants of capital structure of jordanian mining and extraction industries. Capital structure determinants in transitional economies 71 structure of the selected large listed companies in serbia, croatia, and the republic of n orth macedonia, from 2012. Capital structure theories 1 net income approach ni suggested by durand it says a change in the capital structure will lead to a corresponding change in the overall cost of capital as well as the total value of the firm if the ratio of debt to equity is increased, the weighted average cost of capital will decline, while the value of the firm. Smes in total constitute a large proportion of the economic activity and considered to be an engine of. In section 2 the potential determinants of capital structure are summarized and theoretical and empirical evidence concerning these determinants is provided. This study attempts to extend our knowledge of capital structure and its determinants in listed uk companies.
We aims to contribute to the empirical capital structure literature in the. This paper aims to analyze the determinants of the capital structure of the companies in the western balkans wbs using a panel of 30 nonfinancial firms listed in zagreb stock exchange, belgrade stock exchange, and. This paper uses a dynamic unrestricted capital structure model to examine the determinants of the private companies target financial leverage and the speed of adjustment to it in two transition economies, the czech republic and bulgaria. The analysis of the capital structure in the posttransition economies of the balkan countries with the exception of slovenia, has been.
Sorry, we are unable to provide the full text but you may find it at the following locations. However, this economic miracle has been achieved without a modern financial system in place. Abstract this paper analyzes the determinants of the sources of funding for the firms of an economy without stock market. Introduction capital structure refers to the different options used by a firm in financing its assets bhaduri, 2002. Determinants of capital structure have received much attention among the researchers. Many muslim individual and institutional investors seek to invest only in stocks that are compliant with the shariah i. Pdf determinants of capital structure of chineselisted. Within this theory it is suggested that firms make use of internal finance first and if it is determinants of capital structure order theory. The empirical evidence suggested that some traditional capital structure theories are portable to companies in cee countries. Evidence from the banking sector of pakistan sidra amjad, sumaira tufail and bilal hailey college of commerce university of the punjab lahore, pakistan. Once the available and relevant financial sources for a uruguayan firm are defined, their determinants are analyzed. The second capital structure theory which was developed to explain the behavior of firms which static trade off theory failed to explain is the pecking order theory. The determinants of capital structure in transitional.
Consequently, we know little about the applicability of various capital structure theories to firms that are private, small, andor outside the manufacturing industry in these economies. Smes, malaysia introduction smes are important to almost all economies in the world, but especially to those in developing countries. The analysis of the capital structure in the posttransition economies of the balkan countries with the exception of slovenia, has been overlooked by the extant. The roles of firm and countryspecific determinants journal of banking and finance, vol. Many studies including pandey 2001 have identified various determinants of capital structure, which generally include tangibility of assets, size, growth, profitability, and age of firms. The dynamics of capital structure in transition economies, macroeconomics 0303005, university library of munich, germany. Determinants of organizational structure free download as powerpoint presentation. Determinants of capital structure semantic scholar. They suggest that some of the insights from modern finance theory of capital structure are portable to china in that certain firmspecific factors that are relevant for explaining capital structure in developed economies are also relevant in china. Thirdly, a comparison of past and current evidence in terms of dutch institutional settings is presented. The vast majority of previous empirical works analyses the capital structure of firms in economies with highly developed stock markets. We document that serbian firms tend to have much lower debt ratio and that they rely more heavily.
They possibly will need to know the factors that influence the. The findings indicate the emerging character of serbian corporate environment. The paper explores a vast body of literature in articulating critical issues in capital structure decision. Firm, country and macroeconomic determinants of capital structure. Request pdf the determinants of capital structure in transitional economies this study investigates whether capital structure determinants in emerging central and eastern european cee. Figures 14 about here this paper examines the political economic determinants of land allocation between industry and services in china. We model the leverage ratio as a function of firmspecific characteristics. Evidence from transition economies, journal of comparative economics 411, 294308. The theory of trade off was developed by kraus and litzenberger 1973 arguing that the companies choose their optimal. Accordingly, financial managers will principally want to know the relationships between certain firmspecific measures and the debt ratio. Songb afaculty of management and administration, macao university of science and technology, avenida wai long, taipa, macao, peoples republic of china bschool of economics and finance and center for china financial research, the university of hong kong, hong kong, peoples republic of china. Capital structure a reading prepared by pamela peterson drake outline 1. In this study, we attempted to analyze the determinants of capital structure for indian firms using a panel framework and to investigate whether the capital structure models derived from western settings provide convincing explanations for capital structure decisions of the indian firms.
Evidence from an economy without stock market ignacio munyo. Such issues have stimulated new studies about capital structure in small transitional economies such as vietnam. Acta universitatis agriculturae et silviculturae mendelianae brunensis, 20, lxi, no. First, china is the second largest economies in the world and the largest emerging economy with increasingly influential role in the worlds economic system. The determinants like collateral value of assets, size, risk, growth opportunities, profitability and non debt tax shield were studied. G15, g30, g32 introduction capital structure is defined as a combination of equity and debt that a firm uses to finance its assets. This paper was aimed at finding and analyzing the factors that are most important in determining the capital structure of commercial banks in the bric region. The findings reflect the transitional nature of the chinese corporate environment. This paper aims to analyze the determinants of the capital structure of the companies in the western balkans wbs using a panel of 30 nonfinancial firms listed in zagreb stock exchange, belgrade stock exchange, and macedonian stock exchange over the period of 2012. Determinants of the capital structure of chinese non. A major shortcoming of capital structure studies on developing economies is that they generally restrict their analyses to large publiclytraded manufacturing firms.
Capital structure, western balkans, transitional economies, leverage. Capital structure consists of debt as well as internal and external equity. This paper explores the determinants of the capital structure of serbian firms listed on the regulated market using panel data. Determinants of capital structure theoretical aspects corporate finance literature has focused on two broad categories of explanation for capital structure viz. Determinants of capital structure of chineselisted companies. Firm, industry and country level determinants of capital structure. A summarized correlation of each determinant by countries is presented in.
Pdf capital structure determinants in transitional economies. Evidence from transition economies this study explores the significance of firmspecific, institutional, and. Determinants of capital structure of chineselisted companies, journal of business research, elsevier, vol. Determinants of capital structure of chineselisted.
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