| Abstract [eng] |
Capital structure decisions are crucial in financial management because an appropriate mix of debt and equity capital in a company helps to achieve a balance between risk and profitability and maximize a company’s value. Although corporate capital structure determinants have been under scientific debate for a long time, empirical evidence has been contradictory and has shown different relations between various internal and external factors and companies’ financial leverage while investigating companies from different regions or countries. It has been noticed that there is a wide dispersion in leverage ratios across industries, however there is a lack of research where companies would be analysed by classifying them under particular industries or sectors. What is more, there is no one answer what impact the global financial crisis of 2008 had on firms’ capital structure. The capital structure of WSE-listed companies and its determinants have been chosen as the object of this Master’s Final Thesis. The aim of this paper is to analyse theoretical aspects of capital structure formation, based on these findings, to prepare methodology for empirical research of various capital structure determinants and to examine what factors and how affect capital structure decisions in WSE-listed Polish companies from different industries and what impact the global financial crisis of 2008 had on firms’ financial leverage. The paper consists of 4 main chapters. In the first chapter the importance of capital structure in corporate financial management has been identified and the need for further research of corporate capital structure determinants has been discussed. In the second chapter theoretical aspects of the formation of capital structure have been analysed in order to identify the main factors affecting firms’ capital structure and their influence to companies’ debt level. The possible impact of financial crisis of 2008 on firms’ capital structure has been investigated in the second chapter as well. In the third chapter the empirical research methodology of corporate capital structure determinants has been specified. The final fourth chapter starts with the analysis of internal and external factors that affect Polish companies’ capital structure as well as with the examination of capital structure changes in Polish companies from different industries during the period of 2006-2015. Then results of the econometric research have been presented and the main capital structure determinants in WSE-listed companies have been defined. The fourth chapter ends with recommendations for further research. The research of corporate capital structure determinants revealed that main factors affecting capital structure of Polish companies in the period of 2006-2015 were liquidity, profitability, free cash flow, company’s size; growth opportunities, stock market development and banking sector development were significantly associated with indebtedness of companies as well when using market leverage instead of book leverage. However, the research showed that some distinctions between financing decisions of companies operating in different industries exist and the impact of financial crisis on firms’ debt level is uneven in different industries too. The results of research indicate that capital structure decisions of Polish companies are better explained by pecking order theory. Furthermore, overall low financial leverage denotes that companies follow quite conservative financing policy which prevents them from earning higher profit, therefore further development of corporate bond market as an additional source of debt capital in Poland is recommended. |
