Does Capital Structure Drive Profitability in the Energy Sector?
This paper investigates the factors that determine the profitability of non-listed energy firms from four central European countries: Hungary, Poland, Slovakia, and the Czech Republic. We apply the regression analysis, on a large panel of firm-year observations for the 2015–2019 timespan, to verify...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2021-08-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/14/16/4803 |
| _version_ | 1797524050049761280 |
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| author | Monika Wieczorek-Kosmala Joanna Błach Iwona Gorzeń-Mitka |
| author_facet | Monika Wieczorek-Kosmala Joanna Błach Iwona Gorzeń-Mitka |
| author_sort | Monika Wieczorek-Kosmala |
| collection | DOAJ |
| description | This paper investigates the factors that determine the profitability of non-listed energy firms from four central European countries: Hungary, Poland, Slovakia, and the Czech Republic. We apply the regression analysis, on a large panel of firm-year observations for the 2015–2019 timespan, to verify the hypothesis on the inversed relationship between leverage and profitability of the companies performing in the energy sector. Our results support the inversed relationship for debt in total and long-term debt, which are consistent with the assumptions of the pecking order theory. However, for short-term debt, we have found a direct relationship, which confirms the assumptions of the trade-off theory of capital structure. Our work contributes to the existing debate on the interplay between financial leverage and profitability, by providing evidence for a large panel of non-listed firms, from a single sector (energy)-oriented perspective. |
| first_indexed | 2024-03-10T08:51:49Z |
| format | Article |
| id | doaj.art-8e5b9fc818e846f28928db8dbed70d49 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T08:51:49Z |
| publishDate | 2021-08-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-8e5b9fc818e846f28928db8dbed70d492023-11-22T07:27:37ZengMDPI AGEnergies1996-10732021-08-011416480310.3390/en14164803Does Capital Structure Drive Profitability in the Energy Sector?Monika Wieczorek-Kosmala0Joanna Błach1Iwona Gorzeń-Mitka2College of Finance, University of Economics in Katowice, 1 Maja 50, 40-287 Katowice, PolandCollege of Finance, University of Economics in Katowice, 1 Maja 50, 40-287 Katowice, PolandFaculty of Management, Czestochowa University of Technology, J.H. Dąbrowskiego 69, 42-201 Częstochowa, PolandThis paper investigates the factors that determine the profitability of non-listed energy firms from four central European countries: Hungary, Poland, Slovakia, and the Czech Republic. We apply the regression analysis, on a large panel of firm-year observations for the 2015–2019 timespan, to verify the hypothesis on the inversed relationship between leverage and profitability of the companies performing in the energy sector. Our results support the inversed relationship for debt in total and long-term debt, which are consistent with the assumptions of the pecking order theory. However, for short-term debt, we have found a direct relationship, which confirms the assumptions of the trade-off theory of capital structure. Our work contributes to the existing debate on the interplay between financial leverage and profitability, by providing evidence for a large panel of non-listed firms, from a single sector (energy)-oriented perspective.https://www.mdpi.com/1996-1073/14/16/4803capital structurefinancial leverageprofitabilityenergy sector |
| spellingShingle | Monika Wieczorek-Kosmala Joanna Błach Iwona Gorzeń-Mitka Does Capital Structure Drive Profitability in the Energy Sector? Energies capital structure financial leverage profitability energy sector |
| title | Does Capital Structure Drive Profitability in the Energy Sector? |
| title_full | Does Capital Structure Drive Profitability in the Energy Sector? |
| title_fullStr | Does Capital Structure Drive Profitability in the Energy Sector? |
| title_full_unstemmed | Does Capital Structure Drive Profitability in the Energy Sector? |
| title_short | Does Capital Structure Drive Profitability in the Energy Sector? |
| title_sort | does capital structure drive profitability in the energy sector |
| topic | capital structure financial leverage profitability energy sector |
| url | https://www.mdpi.com/1996-1073/14/16/4803 |
| work_keys_str_mv | AT monikawieczorekkosmala doescapitalstructuredriveprofitabilityintheenergysector AT joannabłach doescapitalstructuredriveprofitabilityintheenergysector AT iwonagorzenmitka doescapitalstructuredriveprofitabilityintheenergysector |