<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This article examines the macroeconomic aspects of capital structure of companies in EU countries in the international context during the period 2011–2020. It aims at evaluating the capital structure of European non-financial companies in general, followed by the application of market timing theory and convergence tendencies in the companies within the EU countries. Our results suggest that the equity ratio of examined companies has grown over the last decade at the expense of credit sources of financing. Although our research could not confirm the possibility of market timing theory application, this was due to the limitations of our analysis caused also by an inappropriate data structure. The general result of the examination of convergence suggests that the historical capital structure has a strong impact on the current structure. Analysis of the capital structure of companies in individual European countries also shows that there are still significant differences between these countries, which have been reduced only partially in the medium term, and thus convergence trends are insignificant.</p>
</abstract>

This article examines the macroeconomic aspects of capital structure of companies in EU countries in the international context during the period 2011–2020. It aims at evaluating the capital structure of European non-financial companies in general, followed by the application of market timing theory and convergence tendencies in the companies within the EU countries. Our results suggest that the equity ratio of examined companies has grown over the last decade at the expense of credit sources of financing. Although our research could not confirm the possibility of market timing theory application, this was due to the limitations of our analysis caused also by an inappropriate data structure. The general result of the examination of convergence suggests that the historical capital structure has a strong impact on the current structure. Analysis of the capital structure of companies in individual European countries also shows that there are still significant differences between these countries, which have been reduced only partially in the medium term, and thus convergence trends are insignificant.

Capital structure of non-financial companies in EU countries – macroeconomic view

WSB Journal of Business and Finance

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

This article examines the macroeconomic aspects of capital structure of companies in EU countries in the international context during the period 2011–2020. It...

Capital structure of non-financial companies in EU countries – macroeconomic view

Published Online: Dec 01, 2022

Page range: 8 - 16

DOI: https://doi.org/10.2478/wsbjbf-2022-0002

Keywords
Capital structure, non-financial companies, convergence, market timing theory

© 2022 Peter Kristofik et al., published by Sciendo

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

Capital structure of non-financial companies in EU countries – macroeconomic view

Published Online: Dec 01, 2022

Page range: 8 - 16

DOI: https://doi.org/10.2478/wsbjbf-2022-0002

KeywordsCapital structure, non-financial companies, convergence, market timing theory

© 2022 Peter Kristofik et al., published by Sciendo

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

Keywords
Capital structure, non-financial companies, convergence, market timing theory