Optimal capital structure and leverage adjustment speed of European public and private firms

Klemen Stegovec (Author), Matjaž Črnigoj (Author)

Abstract

In this research paper, the dynamic trade-off theory is tested by applying European public and private firms, since as much of the existing research remains in the US public firm context only. The results of our research show that European firms, both private and public, follow the optimal capital structure path consistent with the dynamic trade-off theory. We find that above optimally levered firms adjust their leverage towards the optimal capital structure faster than the below optimally levered ones. In addition, the results show that public and private firms seem to make similar leverage adjustment decisions and that not only the size but also the public/private status of the firms account for the differences.

Keywords

javni sektor;private sector;capital;structure;indebtedness;

Data

Language:	English
Year of publishing:	2020
Typology:	1.01 - Original Scientific Article
Organization:	UL EF - Faculty of Economics
UDC:	336.76
COBISS:	35559939
ISSN:	1580-0466
Views:	297
Downloads:	99
Average score:	0 (0 votes)
Metadata:

Other data

Secondary language:	Slovenian
Secondary title:	Optimalna struktura kapitala in hitrost prilagajanja zadolženosti evropskih javnih in zasebnih podjetij
Secondary keywords:	public sector;privatni sektor;kapital;struktura;zadolženost;
Type (COBISS):	Article
Pages:	str. 261-288, 318
Volume:	ǂVol. ǂ22
Issue:	ǂno. ǂ2
Chronology:	2020
DOI:	10.15458/ebr103
ID:	12149310