Original scientific paper
https://doi.org/10.32728/ric.2023.91/1
CAPITAL STRUCTURE DETERMINANTS OF LISTED PRIVATE AND STATE COMPANIES: EVIDENCE AND LESSONS FROM BOSNIA AND HERZEGOVINA
Miloš Grujić
orcid.org/0000-0001-5566-5921
; Independent University Banja Luka, Faculty of Economics
Jelena Poljašević
; University of Banja Luka, Faculty of Economics
Abstract
Purpose. The purpose of this paper is to determine and analyze the determinants
of the capital structure of joint-stock companies in Bosnia and Herzegovina that are listed
on the Banja Luka Stock Exchange. This study will answer the question as to which factors
determine the capital structure of BiH companies and whether existing financial theories of
the capital structure hold true in that context. The main research objective is to estimate the
effects of a firm’s level determinants on its capital structure measures in different ownership
structures. Those findings will certainly advance our understanding of listed companies
financing behavior.
Methodology. For the research, we took into account firm-specific characteristics
and divided joint-stock companies into private and state-owned. The results of the research
show that the capital structure of these two groups of enterprises is differently affected by
individual determinants.
Findings and implications. While state-owned enterprises rely more on
borrowed resources to finance both short-term and long-term assets, private enterprises
even finance part of their short-term assets with their own capital. However, the most
important determinant in both groups of enterprises is the share of inventories in short-term
assets, which confirms that short-term liabilities, i.e. free sources of financing in the form
of liabilities to suppliers are the determinant that most positively affect the indebtedness
of all enterprises. Unlike previous research that observed enterprises according to their size
or affiliation to individual industries, the focus of our research is enterprises of different
ownership structures. The empirical statistical results provide basis for logical conclusion
and appropriate policy implications. The study points to the specifics of the capital structure
in private and publicly listed joint-stock companies. The stated opposite influence of certain
ratios on the indebtedness of the enterprises is explained by a number of factors.
Limitations. This study focuses only on the presentation of the recent indicators of
capital structure of listed companies - listed on the Banja Luka Stock Exchange, which is
one of its major limitations. The limitation of this search is the sample size which can be
considered low. Further research may be conducted by using other capital markets to explore
more information regarding the effect of the variables affecting the capital structure. In
addition, further research may also be conducted by using other proxies or by adding more
variables, sample size, and research period to get a better result.
Originality. The study is an original research paper. It has not been published in any
other peer-reviewed journal not under consideration for publication by any other journal.
The paper adds to the existing literature on Bosnia and Hezegovina by giving an overview
of recent developments in the flexi purity concept, pointing out the areas that require policy
response.
Keywords
capital structure; tangible assets; debt; private and state companies
Hrčak ID:
315285
URI
Publication date:
18.3.2024.
Visits: 126 *