The Determination of Financial Structure in Agriculture, Forestry and Fishing Industry in Selected Countries of Central and Eastern Europe

Abstract

Every economic sector, every single industry, every economy, and even every firm has its specific financial structure. Given that it is not possible to examine thousands of individual companies for scientific purposes, it is necessary to at least examine the differences between individual sectors, industries and countries. At the same time, the formation and optimization of the financial structure is influenced by a myriad of diverse factors that financial managers should take into account in their decisions. Thanks to these facts, more and more researches had been created for over half a century. This research expands knowledge in seven selected countries of Central and Eastern Europe – the Visegrád Group, Bulgaria, Slovenia and Romania. The aim of the research is to evaluate, based on the Generalized Method of Moments, the relationship between the six selected factors and the indebtedness level in companies belonging to the agricultural, forestry and fishing industry. The subject of the research is medium, large and very large companies during the years 2009 to 2016. The research deals with the influence of profitability, liquidity, asset structure, economic development, inflation and interest rates on the total, long-term and short-term indebtedness of companies. The main finding of the research is that companies are influenced by both internal and external determinants. However, even though the industry should be neutral, external determinants – GDP growth rates, inflation rates and interest rates – have a more significant impact on the debt level. The results of this research will not only extend current knowledge in the field of corporate finance, but at the same time, the results may be stimulating in setting support rules for public administration and even European institutions, as the selected industry is strongly linked to subsidy policies.

A Systematic Review of Literature and Comprehensive Bibliometric Analysis of Capital Structure Issue

“…In the monitored publications, the keyword capital structure is found in 4,111 articles, which means that approximately 70% of all publications related to capital structure issues contain this keyword. Ruckova and Skulanova (2021) state that the development of the capital structure depends on the conditions of individual enterprises, especially the assets' structure, ownership structure, profitability indicators and many other economic performance indicators. At the same time, it is the result of the operation of the external business environment, determined by the macroeconomic, legislative, and institutional framework conditions.…”

Capital Structure Determinants of Forest Enterprises: Empirical Study Based on Panel Data Analysis from the Czech Republic, Slovakia, and Bulgaria

“…Zafar et al [17], Song [18], Jovanovic [19], Samarakoon et al [20], and Singh [21] calculated the panel data for leverage, such as a dependent variable, explained with internal enterprise financial parameters. R ůčková and Škulá ňová [22] analysed the capital structure determinants for the agriculture, forestry, and fishing industries in Central and Eastern Europe. The authors studied these three sectors together based on data for the period of 2009-2016.…”

“…These authors used determinants of the capital structure or the leverage of different companies as explanatory variables in the panel data model along with external economic variables. Some macroeconomic elements were also previously included, such as those in the works by De Leon and Kanwal [29], Nadeem [30], and R ůčková and Škulá ňová [22]. According to the lack of up-to-date panel data research on the capital structure of forestry in Central and Eastern European countries, the current study is aimed at improving knowledge on leverage determinants.…”

The Analysis of Company Growth Determinants Based on Financial Statements of the European Companies

“…Identifying the determinants that lead to the growth of companies will ensure the development of this sector, providing an incentive to reduce imports and increase exports, which will certainly have a positive impact on the economic growth of European countries. Research conducted by R ůčková and Škulá ňová showed that companies in agriculture, forestry, and fisheries industries in seven countries of central and eastern Europe primarily decided to finance from their own sources in a period of economic growth when profit growth most often occurs [9].…”