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

Stegovec, Klemen (author), Črnigoj, Matjaž (author)

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.

• Language: English
• Keywords: javni sektor, private sector, capital, structure, indebtedness
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: EF - School of Economics and Business
• Publication version: Version of Record
• Year: 2020
• Number of pages: Str. 261-288, 318
• Numbering: Vol. 22, iss. 2
• PID: 20.500.12556/RUL-121967
• UDC: 336.76
• ISSN on article: 1580-0466
• DOI: 10.15458/ebr103
• COBISS.SI-ID: 35559939
• Publication date in RUL: 12.11.2020

Record is a part of a journal

• Title: Economic and business review
• Shortened title: Econ. bus. rev
• Publisher: Ekonomska fakulteta
• ISSN: 1580-0466
• COBISS.SI-ID: 103864832

Licences

• License: CC BY-NC-SA 4.0, Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International
• Link: http://creativecommons.org/licenses/by-nc-sa/4.0/
• Description: A Creative Commons license that bans commercial use and requires the user to release any modified works under this license.
• Licensing start date: 12.11.2020

Secondary language

• Language: Slovenian
• Title: Optimalna struktura kapitala in hitrost prilagajanja zadolženosti evropskih javnih in zasebnih podjetij
• Keywords: public sector, privatni sektor, kapital, struktura, zadolženost