THE INFLUENCE OF CORPORATE SPECIFIC FACTORS UPON FINANCING DECISIONS

• Main Authors: Lacatus Viorel-Dorin, Vaidean Viorela-Ligia, Cuceu Ionut-Constantin
• Format: Article
• Language: deu
• Published: University of Oradea 2013-07-01
• Series: Annals of the University of Oradea: Economic Science
• Subjects: capital structure, debt ratio, theories of capital structure, determinants of capital structure, empirical data
• Online Access: http://anale.steconomiceuoradea.ro/volume/2013/n1/106.pdf

The purpose of this paper is to analyze the existing theories for the capital structure of a corporation and to determine the factors that influence the financing decisions of Romanian corporations. The gearing ratios vary a lot among Romanian corporations pointing out the fact that the internal specific factors are the ones with a greater impact upon their capital structure, and not the external factors. Our empiric research evaluates the determining factors for the debt ratio (total debt/total assets) of some Romanian corporations, focusing on its explanatory variables by including them within simple and multiple econometric models. The panel data indicators computed for the companies in the Cluj area listed on the Bucharest Stock Exchange were evaluated with the OLS and FEM techniques.The results have been interpreted, pointing out that company size and asset turnover seem to have a positive influence upon the debt ratio of selected companies, while profitability and liquidity seem to influence the debt ratio of selected companies negatively.