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The Impact of Financial Structure on the Performance of European Listed Firms

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  • Hani El-Chaarani

Abstract

By considering different systems of legal protection this study examines the impact of capital structure on the performance of listed firms in European region. Based on 5050 listed firms in eight European countries, the results of the study reveal that the owners in low level of legal protection are more likely to use the capital structure of the firms in order to serve their proper interests. In high level of legal protection, the market based system and the debts are enrolled to constraint the expropriation of private benefits.

Suggested Citation

  • Hani El-Chaarani, 2014. "The Impact of Financial Structure on the Performance of European Listed Firms," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 103-124.
    • Handle: RePEc:ers:journl:v:xvii:y:2014:i:3:p:103-124
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    File URL: http://www.ersj.eu/repec/ers/papers/14_3_p7.pdf
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    More about this item

    Keywords

    Capital Structure; Financial Performance; Legal Protection; Financial Behaviour; Leverage;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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