Corporate capital structure: the case of large Croatian companies

Abstract

, split, Republic of croatia; b Faculty of tourism and organizational sciences, insurance supervisory agency of Republic of macedonia, skopje, University st. kliment ohridski, ohrid, Republic of macedonia ABSTRACT A growing body of research literature deals with the debt policy decisions of companies. Although the subject of corporate capital structure has been intriguing scientists for a number of years, very little research has been conducted on the sample of companies in an emerging market environment such as Croatia. The objective of this article is to identify the main determinants of capital structure in case of large companies in Croatia during the period from 2001-2010. The chosen set of explanatory variables is driven by firmspecific (internal) characteristics and is additionally extended by macroeconomic (external) features. The results obtained by dynamic panel data methodology reveal that neither of the two competing theories exclusively and completely explain the financing behaviour of the analysed companies, and that inflation and development of the banking sector are important factors that affect the corporate leverage level.

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