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Firm-Level and Institutional Determinants of Corporate Capital Structure in Poland: New Evidence from the Warsaw Stock Exchange

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  • Christopher A. Hartwell

    (Department of Accounting, Finance & Economics, Bournemouth University, Bournemouth, UK
    Department of International Management, Kozminski University Warsaw, Poland)

  • Anna P. Malinowska

    (Department of International Management, Kozminski University Warsaw, Poland)

Abstract

This paper discusses how well major capital structure theories incorporate firm-level and institutional factors into short-term firm financing decisions in a specific context, that of a transition economy. Using a new dataset of non-financial companies quoted on the Warsaw Stock Exchange between 2007-2015, we argue that neither the trade-off nor the pecking order theories fully explain corporate debt policies in Poland. The results of dynamic panel data modelling highlight the importance of the strength of property rights and stock market capitalisation as driving forces behind corporate financing decisions.

Suggested Citation

  • Christopher A. Hartwell & Anna P. Malinowska, 2018. "Firm-Level and Institutional Determinants of Corporate Capital Structure in Poland: New Evidence from the Warsaw Stock Exchange," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 68(2), pages 120-143, April.
    • Handle: RePEc:fau:fauart:v:68:y:2018:i:2:p:120-143
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    2. Nguyen, Bach, 2021. "Local institutions, external finance and investment decisions of small businesses in Vietnam," Economic Systems, Elsevier, vol. 45(3).

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    More about this item

    Keywords

    capital structure; pecking order theory; trade-off theory; institutions; transition economies;
    All these keywords.

    JEL classification:

    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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