2/2006 Karin Jõeveer. Sources of capital structure: Evidence from transition countries

Working Papers of Eesti Pank. No 2, 2006

This study explores the significance of firm-specific, country institutional and macroeconomic factors in explaining the leverage variation of a sample of firms from nine Eastern European countries. Countryspecific factors are the most prominent determinants of leverage variation for small unlisted companies while firm-specific factors explain most of the leverage variation in listed and large unlisted companies. Half of the leverage variation related to country factors is explained by known macroeconomic and institutional factors while the other half by unquantifiable institutional differences.
JEL Code: G32
Key words: capital structure, Eastern Europe

*  CERGE-EI, Charles University, Prague.
This paper was written during my visit to the Research Department at Eesti Pank. I am grateful for their hospitality and financial support.

Author's e-mail address: karin.joeveer [at] cerge-ei.cz

The views expressed are those of the author and do not necessarily represent the official views of Eesti Pank.


1. Introduction
2. Capital Structure in Transition Economies
3. Data and Methodology
4. Results
5. Conclusions
Appendix 1. Summary Statistics at 2000
Appendix 2. Anova Results for Listed Firms
Appendix 3. Anova Results for Unlisted Firms
Appendix 4. Anova Results for Listed Firms
Appendix 5. Anova Results for Unlisted Firms
Appendix 6. Leverage Regression in 1995-2002

Sources of Capital Structure: Evidence from Transition Countries, Working Papers of Eesti Pank No 2, 2006 (PDF*)

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