Capital structure in EU selected countries – micro and macro determinants

Capital structure in EU selected countries – micro and macro determinants


Marcin Kędzior


Keywords: capital structure, microeconomic, macroeconomic, institutional determinants


Summary: The paper presents own research on the determinants which have an impact on the capital structure of 1063 companies from selected EU member states. The detailed analysis of empirical data refers to the following countries: Finland, France, Greece, Spain, the Netherlands, Germany, the UK, Romania, Italy, Lithuania, Latvia, Poland and Slovakia. The objective of the paper is to compare capital structure and its determinants in new and old EU member states. The author proves that capital structure is affected not only by the traditional determinants related to a business entity (such as industry, profitability, size and growth potential) but also macroeconomic/institutional factors including economic growth, inflation rates, corporate income taxes, the development of the banking sector and capital markets and national legal frameworks. It is the first time literature has recorded different corporate capital structures in new and old EU member states as well as different capital structure determinants. The empirical material is consistent in terms of the accounting valuation – for the first time recorded in literature – which is proved by the statistical analysis. This paper provides an analysis of the impact of International Accounting Standards on companies’ capital structure. The paper presents the hierarchy of capital structure determinants in terms of their statistical significance.



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