Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European Union
The aim of the study is to identify the main determinants of the capital structure of energy industry companies in the European Union. The study was based on a panel of 6122 companies from 25 EU countries, operating between 2011 and 2018. The study used multiple regression analysis. We have obtained...
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| Format: | Article |
| Language: | English |
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MDPI AG
2021-03-01
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| Series: | Energies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/1996-1073/14/7/1871 |
| _version_ | 1797539789419839488 |
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| author | Jacek Jaworski Leszek Czerwonka |
| author_facet | Jacek Jaworski Leszek Czerwonka |
| author_sort | Jacek Jaworski |
| collection | DOAJ |
| description | The aim of the study is to identify the main determinants of the capital structure of energy industry companies in the European Union. The study was based on a panel of 6122 companies from 25 EU countries, operating between 2011 and 2018. The study used multiple regression analysis. We have obtained strong evidence for a positive relationship between corporate debt and tangibility and size, and a negative relationship for profitability and liquidity. The factors that also affect the share of debt in capital have turned out to be growth (positive relationship) and non-debt tax shield (negative relationship), but the statistical significance of these relationships is ambiguous. We have shown that growth of industry business risk is accompanied by an increase in corporate debt and this is a distinguishing feature of the energy industry. For country-specific capital structure determinants, we have obtained strong evidence for the negative relationship between GDP growth, the level of stakeholder rights protection, the degree of capital markets development, and indebtedness of the companies studied. There has been moderate support for the hypotheses of a positive effect of inflation, taxation, and the degree of financial institutions development. Our study has also shown a negative impact of the volume of energy consumption and the share of renewable sources in its production and a positive impact of market monopolization on the indebtedness of companies from the energy industry in the EU. |
| first_indexed | 2024-03-10T12:50:51Z |
| format | Article |
| id | doaj.art-f7061f898a3c413fba111d12a4da185c |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T12:50:51Z |
| publishDate | 2021-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-f7061f898a3c413fba111d12a4da185c2023-11-21T13:09:26ZengMDPI AGEnergies1996-10732021-03-01147187110.3390/en14071871Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European UnionJacek Jaworski0Leszek Czerwonka1Department of Finance, WSB University in Gdańsk, 80-266 Gdańsk, PolandFaculty of Economics, University of Gdańsk, 80-309 Gdańsk, PolandThe aim of the study is to identify the main determinants of the capital structure of energy industry companies in the European Union. The study was based on a panel of 6122 companies from 25 EU countries, operating between 2011 and 2018. The study used multiple regression analysis. We have obtained strong evidence for a positive relationship between corporate debt and tangibility and size, and a negative relationship for profitability and liquidity. The factors that also affect the share of debt in capital have turned out to be growth (positive relationship) and non-debt tax shield (negative relationship), but the statistical significance of these relationships is ambiguous. We have shown that growth of industry business risk is accompanied by an increase in corporate debt and this is a distinguishing feature of the energy industry. For country-specific capital structure determinants, we have obtained strong evidence for the negative relationship between GDP growth, the level of stakeholder rights protection, the degree of capital markets development, and indebtedness of the companies studied. There has been moderate support for the hypotheses of a positive effect of inflation, taxation, and the degree of financial institutions development. Our study has also shown a negative impact of the volume of energy consumption and the share of renewable sources in its production and a positive impact of market monopolization on the indebtedness of companies from the energy industry in the EU.https://www.mdpi.com/1996-1073/14/7/1871capital structure determinantsenergy industryEuropean Unioncapital structure theoriesindebtedness of energy industry |
| spellingShingle | Jacek Jaworski Leszek Czerwonka Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European Union Energies capital structure determinants energy industry European Union capital structure theories indebtedness of energy industry |
| title | Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European Union |
| title_full | Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European Union |
| title_fullStr | Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European Union |
| title_full_unstemmed | Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European Union |
| title_short | Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European Union |
| title_sort | determinants of enterprises capital structure in energy industry evidence from european union |
| topic | capital structure determinants energy industry European Union capital structure theories indebtedness of energy industry |
| url | https://www.mdpi.com/1996-1073/14/7/1871 |
| work_keys_str_mv | AT jacekjaworski determinantsofenterprisescapitalstructureinenergyindustryevidencefromeuropeanunion AT leszekczerwonka determinantsofenterprisescapitalstructureinenergyindustryevidencefromeuropeanunion |