Sources of Capital Structure: Evidence from Transition Countries

CERGE-EI Working Paper No. 306

29 Pages Posted: 8 May 2008

See all articles by Karin Jõeveer

Karin Jõeveer

Tallinn University of Technology (TUT)

Date Written: September 1, 2006


This study explores the significance of firm-specific, institutional, and macroeconomic factors in explaining variation in leverage using a sample of firms from nine Eastern European countries. Country-specific factors are the main determinants of variation in leverage for small unlisted companies, while firm-specific factors explain most of the variation in leverage for listed and large unlisted companies. Around half of the variation in leverage related to country factors is explained by known macroeconomic and institutional factors, while the remainder is explained by unmeasurable institutional differences (e.g. law and enforcement). These findings are in line with the results for Western European countries in Jõeveer (2005) and show that country characteristics are not more significant determinants of leverage in these transition economies.

Keywords: Capital structure, Eastern Europe

JEL Classification: G32

Suggested Citation

Jõeveer, Karin, Sources of Capital Structure: Evidence from Transition Countries (September 1, 2006). CERGE-EI Working Paper No. 306, Available at SSRN: or

Karin Jõeveer (Contact Author)

Tallinn University of Technology (TUT) ( email )

Ehitajate tee 5
Tallinn, 12618

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