<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Viewed retrospectively since the work of Modigliani and Miller (<xref ref-type="bibr" rid="j_sbe-2019-0021_ref_034_w2aab3b7b1b1b6b1ab1ac34Aa">M&amp;M, 1958</xref>), the capital structure still remains a matter of study. The capital structure issue then is examined from different perspectives, and thus intertwining firms and macroeconomic determinants. Studies were focused to examine the relationship between leverage ratios and macroeconomic environment. Motivated from what was done earlier, we try to bring in this study evidence as well. Thus, totally 49 Ukrainian firms are selected and data are examined from 2012 to 2016. The paper is aimed at studying the process of leverage adjusting by examining five firm’s characteristics and three macroeconomic determinants. We found that leverage is influenced significantly from both, firm characteristics and macroeconomic determinants. The study provides evidence those firms with higher tax shield, tangibility, net trade credit, and profitability used more leverage than counterparties. Firm’s size and inflation are confirmed as insignificant determinants. On the other hand, GDP growth rate and default spread are confirmed to play a role on leverage policies.</p></abstract>

Viewed retrospectively since the work of Modigliani and Miller (M&M, 1958), the capital structure still remains a matter of study. The capital structure issue then is examined from different perspectives, and thus intertwining firms and macroeconomic determinants. Studies were focused to examine the relationship between leverage ratios and macroeconomic environment. Motivated from what was done earlier, we try to bring in this study evidence as well. Thus, totally 49 Ukrainian firms are selected and data are examined from 2012 to 2016. The paper is aimed at studying the process of leverage adjusting by examining five firm’s characteristics and three macroeconomic determinants. We found that leverage is influenced significantly from both, firm characteristics and macroeconomic determinants. The study provides evidence those firms with higher tax shield, tangibility, net trade credit, and profitability used more leverage than counterparties. Firm’s size and inflation are confirmed as insignificant determinants. On the other hand, GDP growth rate and default spread are confirmed to play a role on leverage policies.

Leverage and Macroeconomic Determinants: Evidence from Ukraine

Kyiv National Economic University after Vadym Hetman

Studies in Business and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Leverage and Macroeconomic Determinants: Evidence from Ukraine"}

Viewed retrospectively since the work of Modigliani and Miller (M&M, 1958), the capital structure still remains a matter of study. The capital structure issue...

Leverage and Macroeconomic Determinants: Evidence from Ukraine

Published Online: Sep 16, 2019

Page range: 5 - 19

DOI: https://doi.org/10.2478/sbe-2019-0021

Keywords
Leverage, Determinants, Macroeconomics

© 2019 Deari Fitim et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Leverage and Macroeconomic Determinants: Evidence from Ukraine

Published Online: Sep 16, 2019

Page range: 5 - 19

DOI: https://doi.org/10.2478/sbe-2019-0021

KeywordsLeverage, Determinants, Macroeconomics

© 2019 Deari Fitim et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Leverage, Determinants, Macroeconomics