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The Impact of Corporate Governance on the Capital Structure of Companies from the Energy Industry. The Case of Poland

Author

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  • Barbara Grabinska

    (Department of Finance and Financial Policy, Cracow University of Economics, 31-510 Cracow, Poland)

  • Marcin Kedzior

    (Department of Financial Accounting, Cracow University of Economics, 31-510 Cracow, Poland)

  • Dorota Kedzior

    (Department of Corporate Finance, Cracow University of Economics, 31-510 Cracow, Poland)

  • Konrad Grabinski

    (Department of Financial Accounting, Cracow University of Economics, 31-510 Cracow, Poland)

Abstract

The energy sector is expected to face fundamental challenges in the near future. On the one hand, it is experiencing a rapidly increasing demand for energy. At the same time, it is subject to the pressure of the climate policy due to environmental issues. For the same reason, the energy sector is forced to undertake costly investments to transform production from black to green energy. The issue of financing has become one of the key problems of the energy sector, especially in those countries in which energy production traditionally is based on fossil fuels, i.e., coal. The paper aims to investigate the impact of corporate governance on the capital structure of companies from the energy industry. We use three proxies of corporate governance quality: institutional investors, the board size, and state ownership and investigate their impact on capital structure. Our findings suggest that the latter two negatively impact debt levels. In our model, we control for financial factors and CEO personal characteristics. We use a Polish setting since transformational problems of the energy sector in Poland are especially visible. At the same time, energy companies in Poland are subject to the strict EU climate policy.

Suggested Citation

  • Barbara Grabinska & Marcin Kedzior & Dorota Kedzior & Konrad Grabinski, 2021. "The Impact of Corporate Governance on the Capital Structure of Companies from the Energy Industry. The Case of Poland," Energies, MDPI, vol. 14(21), pages 1-25, November.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:21:p:7412-:d:673908
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