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Determinants of Enterprises’ Capital Structure in Poland: Evidence from Warsaw Stock Exchange

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Eurasian Economic Perspectives

Part of the book series: Eurasian Studies in Business and Economics ((EBES,volume 10/2))

Abstract

The aim of the paper is to identify factors that affect the financing structure of Polish companies listed on the Warsaw Stock Exchange in the period 1998–2012. In the first part of the paper the modern theories of capital structure are reviewed and main determinants of this structure are identified. The second part provides empirical verification of the relationship between debt and found factors using panel models. The capital structure of studied enterprises measured by the total debt ratio is most adequately explained by the pecking order theory. The increase in the share of fixed assets in total assets, profitability, liquidity and company size influences the reduction of its debt. The non-debt tax shield affected the debt level differently from the pecking order theory. The positive relationship between non-debt tax shield and debt corresponds to the agency theory. While a large number of studies conducted in other countries confirm the significance of the impact regarding the above factors on the long-term debt ratio, in Poland a similar relationship is not noticeable. Long-term debt is determined only by the share of fixed assets in total assets. It indicates the importance of short-term debt in the financing of Polish enterprises.

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Author information

Authors and Affiliations

  1. Faculty of Economics, University of Gdańsk, Gdańsk, Poland

    Leszek Czerwonka

  2. Department of Finance, WSB University in Gdańsk, Gdańsk, Poland

    Jacek Jaworski

Authors
  1. Leszek Czerwonka
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  2. Jacek Jaworski
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Corresponding author

Correspondence to Jacek Jaworski .

Editor information

Editors and Affiliations

  1. Faculty of Political Sciences, Istanbul Medeniyet University, Istanbul, Turkey

    Mehmet Huseyin Bilgin

  2. MUFG Union Bank, San Francisco, CA, USA

    Hakan Danis

  3. Faculty of Tourism, Istanbul Medeniyet University, Istanbul, Turkey

    Ender Demir

  4. Eurasia Business & Economic Society, Fatih, Istanbul, Turkey

    Ugur Can

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Czerwonka, L., Jaworski, J. (2019). Determinants of Enterprises’ Capital Structure in Poland: Evidence from Warsaw Stock Exchange. In: Bilgin, M., Danis, H., Demir, E., Can, U. (eds) Eurasian Economic Perspectives. Eurasian Studies in Business and Economics, vol 10/2. Springer, Cham. https://doi.org/10.1007/978-3-030-11833-4_16

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