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 Joeveer

Karin Joeveer

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Date Written: September 1, 2006

Abstract

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

Joeveer, Karin, Sources of Capital Structure: Evidence from Transition Countries (September 1, 2006). CERGE-EI Working Paper No. 306. Available at SSRN: https://ssrn.com/abstract=1130306 or http://dx.doi.org/10.2139/ssrn.1130306

Karin Joeveer (Contact Author)

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

Politickych veznu 7
Prague 1, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

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