engleski

Capital structure of Croatian enterprises

Due to globalization, nowadays enterprises run their businesses in a competitive and dynamic environment. Such a complex ambient has made the managers more cautious while making their business decisions. The same applies when it comes to the financing decisions since they undoubtedly affect the future value of the firm and its existence on the market. The purpose of this paper is to analyze the capital structure of Croatian firms in the time period from 2007. – 2012. Since most of the literature on capital structure studies firms in developed countries, it would be important to investigate whether the same results apply to enterprises of transition economies. The authors of this paper familiarize the readers with the most important ideas and theories developed in this area, as with the main research and empirical results that confirm or refute theoretical hypothesis. Since financing decisions have a strong influence on the value of enterprises, the aim of this paper is to encourage the development of capital structure research in transition economies. In doing so, the authors descriptively analyze the financial leverage of Croatian firms during the six-year period and examine the determinants of capital structure that seems to have the most important influence on financing decisions of firms. With that aim, the authors investigate relations between financial leverage as a dependent, and profitability, firm size, business risk, and tangibility as independent variables.

Capital structure ; Croatian enterprises ; determinants of capital structure

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