Business Excellence, Vol. 13 No. 1, 2019.
Preliminary communication
https://doi.org/10.22598/pi-be/2019.13.1.87
CAPITAL STRUCTURE OF SMALL AND MEDIUM-SIZED ENTERPRISES IN THE REPUBLIC OF CROATIA
Martina Harc
orcid.org/0000-0002-7207-9032
; The Institute for Scientific and Artistic Work, Croatia Academy of Sciences and Arts in Osijek, Osijek, Croatia
Abstract
The European Commission emphasizes that adequate access to finance is an
important determinant for development of companies, especially for small and mediumsized
enterprises that face different challenges during funding. According to economic
importance and importance of small and medium-sized enterprises, the choice of
financing methods is one of the most important decisions in business operations.
Therefore, the aim of this paper is to analyze the impact of selected variables on the
capital structure of small and medium-sized enterprises in Croatia. Explanation of the
relationship between the capital structure and the analyzed variables can help companies
to make more effective financial decisions, adapt to changing macroeconomic conditions
and ultimately promote stable growth and development. For this purpose, using the
estimator of the generalized method of moments in two steps, a dynamic panel model was
estimated for the period from 2008 to 2017. The empirical analysis carried out has
confirmed that profitability, size of the company, tangible assets and tax protection
positively affect the company's capital structure. Furthermore, the analysis confirmed
that liquidity and growth have a negative statistically significant impact on the capital
structure of the company.
Keywords
capital structure; pecking-order theory; trade-off theory; small and medium-sized enterprises.
Hrčak ID:
221255
URI
Publication date:
17.6.2019.
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