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The Determinants of Capital Structure: Evidence from companies listed on the WIG20 index of the Warsaw Stock of Exchange
| 1 | WSGE |
AUTOR DO KORESPONDENCJI
Data nadesłania: 28-07-2017
Data ostatniej rewizji: 13-12-2017
Data akceptacji: 15-12-2017
Data publikacji: 27-01-2018
JoMS 2017;35(4):161–176
SŁOWA KLUCZOWE
DZIEDZINY
STRESZCZENIE
Cel pracy:
The aim of the article is to determine the capital structure which is used by selected polish listed companies on the Index WIG20 of the Warsaw Stock of Exchange (WSE).
Materiał i metody:
In this article, the panel data analysis was used, in order to investigate the relationship between the choice of the structure of the capital and elements related to financial statements of selected polish companies of the WIG20.
Wyniki:
Evidences from the article generally suggests the relevance of the pecking order hypothesis in explaining the financing choices of Polish firms. Companies have some preferences regarding their financing. First, the highest preference is to use internal financing (retained earnings and the effects of depreciation) before resorting to any form of external funds as they have a low level of fixed assets. Secondly, Polish companies rely on short-term debt either because of undeveloped bond market or due to high-cost long-term bank debt. Companies are using retained earnings for financing themselves and automatically reduce the level of dividends which maybe payed to shareholders. Instead of emitting new shares which maybe undervalued, companies prefer to take loans in spite of high credit costs in Poland in comparison to other European countries.
Wnioski:
The article also emphasized that capital structure choice may be the result of a complex interaction of many institutional features and business practices that are not fully captured by differences in the legal systems, which is especially important such as Poland where the legal system is quickly changing due to new politicians at the head of the state. All industry variable coefficients are statistically important and do confirm differences in capital structure among industries. This a topic which can be covered within a future article.
The aim of the article is to determine the capital structure which is used by selected polish listed companies on the Index WIG20 of the Warsaw Stock of Exchange (WSE).
Materiał i metody:
In this article, the panel data analysis was used, in order to investigate the relationship between the choice of the structure of the capital and elements related to financial statements of selected polish companies of the WIG20.
Wyniki:
Evidences from the article generally suggests the relevance of the pecking order hypothesis in explaining the financing choices of Polish firms. Companies have some preferences regarding their financing. First, the highest preference is to use internal financing (retained earnings and the effects of depreciation) before resorting to any form of external funds as they have a low level of fixed assets. Secondly, Polish companies rely on short-term debt either because of undeveloped bond market or due to high-cost long-term bank debt. Companies are using retained earnings for financing themselves and automatically reduce the level of dividends which maybe payed to shareholders. Instead of emitting new shares which maybe undervalued, companies prefer to take loans in spite of high credit costs in Poland in comparison to other European countries.
Wnioski:
The article also emphasized that capital structure choice may be the result of a complex interaction of many institutional features and business practices that are not fully captured by differences in the legal systems, which is especially important such as Poland where the legal system is quickly changing due to new politicians at the head of the state. All industry variable coefficients are statistically important and do confirm differences in capital structure among industries. This a topic which can be covered within a future article.
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