No abstract

MOKHOVA NATALIA, ZINECKER MAREK: The determinants of capital structure: the evidence from the European Union. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2013, LXI, No. 7, pp. 2533-2546 The aim of this study is to indicate the infl uence of several internal determinants on capital structure in diff erent European countries and retrace its tendency taking into consideration the membership of the European Union. Nowadays there are a lot of debates according the future of the European Union. The recent global fi nancial crisis and the following European debt crisis show the signifi cance of the country fi nancial stability and its impact on the private sector. The paper investigates 32 countries of European Union dividing them into three groups as (1) old EU members (15 countries), (2) new EU members (12 countries) and (3) EU candidates (4 candidate countries and 1 acceding country). The managers make their fi nancial decisions according to the source of fi nancing and capital structure based on the macroeconomic conditions and country specifi cs and obviously on company's advantages and disadvantages, i.e. its internal characteristics. Based on the analysis of previous studies we have chosen several signifi cant internal determinants of capital structure as profi tability, tangibility, growth opportunities, non-debt tax shields and fi rm's size. The fi ndings show that the country's specifi cs, EU membership and corporate debt structure infl uence the relation between capital structure and its internal characteristics. The capital structure in all countries has tendency to increase, furthermore the old members rely more on debt then candidates or new members. There is no doubt that the majority of countries support Pecking Order Theory then Trade off Theory regarding investigated relations. In most countries the profi tability and size have negative and signifi cant infl uence on corporate capital structure. At the same time tangibility, growth opportunities and non-debt tax shields split up: selected countries experience positive impact, another part negative, supporting diff erent theories. capital structure, fi nancial performance, European Union, determinantsThere are a lot of discussions nowadays concerning the future of European Union (EU): should it stand against the following economic shocks and be treated from fi nancial contagion on macro level or separately? However, some countries are still willing to be part of EU. First of all, the main reason is expected economic growth due to the increased foreign investments from EU members. Another reason concerns the fi nancial aids for economic development in the case of crisis. The migration issue has been taken into consideration as well, as it will infl uence the employment rate and standards of living. Nevertheless, in order to be a true member of EU, the members and candidates have to meet so called convergence criteria (Maastricht criteria), which regulate the fi nancial stability of a country. The countries are contro...

In this paper we compile and evaluate the research available on internal factors influencing the cost of equity capital. The topic has been extensively studied for the past few decades; however, the information is spread and is not accumulated. We begin by reiterating the reasons why information asymmetry drives financial decisions. Next, we review recent literature that focuses on financial disclosure and accounting information, i.e. internal factors that are directly connected with information asymmetry. In the remainder of our review we discuss a recent debate on the impact of corporate governance and social factors. Aside from theoretical contribution, the comprehensive literature review of existing studies results in formulation of a strategy how to decrease to cost of equity capital by means of internal factors adjustments. We believe that highlighting the key points in the debate will be beneficial for both academicians and practitioners who will be able to form an independent view of the approaches how to take influence on the cost of equity capital.

No abstract

After the Global Financial Crisis the frequency of reported losses of companies has increased significantly in countries of the European Union. Moreover, the financial leverage of companies have increased and even exceeded 100% in several countries. The reason of this development is negative equity that companies find themselves to report. At first sight negative equities are caused by accumulated losses from prior periods. However, there are some other reasons that can result in increasing negative equities in companies. They remain adequate as long as a company is able to pay its bills. Nevertheless, a company with negative equity is exposed to risks. This paper investigates whether the corporate negative equity is a sign of the future failure of a company. We examine non-financial manufactured companies from selected countries of the European Union within the period 2005–2012 from database Amadeus (Czech Republic, Slovakia, Hungary, Poland and Germany). By the means of comparison between negative and positive equities we applied descriptive statistics and Pearson correlation analysis. We find that in all surveyed countries the size positively influences the equity of companies. Other factors as profitability and growth opportunities do not influence the corporate equity. In addition the binary logistic regression analysis has been conducted based on the evidence from Czech companies. Our results indicate that negative equities are not a sign of bankruptcy or insolvency of a company. But the low profitability or low business activities (that are predictors of bankruptcy) might lead to negative equities in the balance sheet.