The Factors Determining the Specific Nature of Formation of the Capital Structure: Evidence from Maritime Sector

Abstract

AbstractUnder the conditions of global market economy one of the most important management tasks of business companies is to take economically grounded decisions concerning the structure of financing sources. It has been established that differences of formation of capital structure which are namely determined by the specific nature of activity of business companies exist as well. Maritime sector is an important component of the country economy and firm-level factors, and macro factors determine the formation of capital structure of the business companies of this sector to a different significance. The aim of this article has been to present the systematized theoretic conceptions of formation of capital structure by singling out and grouping the factors determining the formation and to establish the impact of the factors in the business companies of maritime sector revealing their relation with the formed capital structure. For the empirical research, the data collected from Bloomberg databases for the year 2010—2019 have been employed in 180 European companies of maritime sector. In this study, a panel data approach as fixed and random effects have been used. The obtained results show that the formation of the capital structure of European maritime companies is positively influenced by the company’s factors such as profitability, company size, tangibility and company growth. Among the macro factors, the formation of the capital structure is negatively influenced by the ratio of foreign direct investments.KeywordsCapital structureFinancial LeverageFirm-level factorsMacro factorsMaritime sector