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What Determines The Capital Structure Of Listed Firms In Romania

Author

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  • Florinita Duca

    (The Bucharest University of Economic Studies, Bucuresti, România)

Abstract

This paper examines the relative importance of four factors in the capital structure decisions of Romanian listed firms. The existing empirical research on capital structure has been largely confined to developed countries. The Romanian Financial Market has been developing at an exponential rate and dedicated research in the field is required. We used 100 firms listed in 2010 at the Bucharest Stock Exchange. The objective of this paper is to build on previous studies model all the important factors affecting capital structure decisions. We find that factors such as tangibility of assets, firm size, liquidity, and profitability have significant influences on the leverage structure chosen by firms. These results are believed to have significant implications for the theory of finance and to be of importance to the corporate treasure in choice of new financing and to the financial analyst.

Suggested Citation

  • Florinita Duca, 2012. "What Determines The Capital Structure Of Listed Firms In Romania," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 4(3a), pages 523-531, September.
    • Handle: RePEc:jes:wpaper:y:2012:v:4:i:3a:p:523-531
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    File URL: http://ceswp.uaic.ro/articles/CESWP2012_IV3a_DUC.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    profitability; firm size; leverage; total assets turnover Romania;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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