Naslov
Corporate growth and capital structure: an empiraical study of Sme's in Croatia

Autori
Harc, Martina

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
34rd Joint Scientific Symposium, Regional and international competition - a challenge for companies and countries / Jautz, Ulrich ; Kurz, Rudi ; Singer, Slavica ; Barković, Dražen - Pforzheim : Ekonomski fakultet Sveučilišta Josipa Jurja Strossmayera u Osijeku, 2013, 65-75

ISBN
978-953-253-130-5

Skup
34rd Joint Scientific Symposium, Regional and international competition - a challenge for companies and countries

Mjesto i datum
Pforzheim, Njemačka, 07.11.2013. - 08.11.2013

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
capital structure; growth; leverage; small and medium-sized enterprises

Sažetak
From the theoretical point of view, existing empirical studies widely used two models of capital structure: the trade-off theory and the pecking order theory. Trade-off theory imply that company's capital structure decisions involve a trade-off between the tax benefits of debt financing and the costs of financial distress. Pecking order theory points out that there is a certain order in financing starting from retained earnings as a primary source of internal financing, then moving to debt and using equity only as a last resort. Each of these theories suggests how certain determinants affect capital structure. According to theories, researchers found various impacts of determinants on capital structure depending on country which they analyze. The aim of this paper is to investigate how does growth affect capital structure of Croatian small and medium-sized enterprises. Previous studies have shown a various relationships between growth and leverage. This study has been conducted on a sample of 500 Croatian SME's for the period 2005. to 2010. The data used for the empirical analysis were derived from companies' annual reports. Pearson correlation coefficient is applied in order to examine the relationship between growth and leverage measures. The results of this research indicate negative relationship between growth and leverage. But, growth differentially affect short-term and long-term leverage. The relationship between growth and short-term leverage is negative. The relationship between growth and long-term leverage is not negative in all observed years. These results are not significant but they may suggests that Croatian SME's with growth potential will tend to have lower leverage. Results show that growth do not explain leverage needs, meaning that growth is not important determinant of capital structure. These findings are consistent with the trade-off theory.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA