Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs
The present study has investigated the moderating effect of the European Financial Stability Facility (EFSF) / European Stability Mechanism (ESM) support to the firms’ indebtness. Using dynamic panel data, three models were estimated and aimed at the determination of the way that EFSF/ESM financial...
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| Format: | Article |
| Language: | English |
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UUM Press
2022
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| Online Access: | https://repo.uum.edu.my/id/eprint/29213/1/IJBF%2017%2001%202022%2081-108.pdf |
| _version_ | 1825805943476060160 |
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| author | Chatzinas, Georgios Papadopoulos, Symeon |
| author_facet | Chatzinas, Georgios Papadopoulos, Symeon |
| author_sort | Chatzinas, Georgios |
| collection | UUM |
| description | The present study has investigated the moderating effect of the European Financial Stability Facility (EFSF) / European Stability Mechanism (ESM) support to the firms’ indebtness. Using dynamic panel data, three models were estimated and aimed at the determination of the way that EFSF/ESM financial assistance programs could influence the impact of five firm-specific characteristics, namely growth, profitability, size, tangibility and non-debt tax shield on the capital structure of European firms. Data from 2,086 firms for the period 2003 – 2016 were used, and two dummy variables; one for the EFSF/ESM support period and one for any kind of economic crisis period were formed. The results indicated that pecking order prevailed over trade-off theory. Economic crises did not affect severely the firm-characteristics’ effects, but the EFSF/ESM programs influence appeared in three cases. During the period of EFSF/ESM assistance, profitability’s negative effect on long-term debt ratio disappeared and on total debt ratio strengthened, growth’s positive impact on total debt ratio diminished and non-debt tax shield acquired positive influence on total debt ratio. These changes might be explained by the increased levels of tax rates and decreased levels of uncertainty that the EFSF/ ESM programs caused, as well as by the reluctance of lenders to provide new funds. |
| first_indexed | 2024-07-04T06:40:30Z |
| format | Article |
| id | uum-29213 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:40:30Z |
| publishDate | 2022 |
| publisher | UUM Press |
| record_format | eprints |
| spelling | uum-292132023-03-05T08:33:47Z https://repo.uum.edu.my/id/eprint/29213/ Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs Chatzinas, Georgios Papadopoulos, Symeon HG Finance The present study has investigated the moderating effect of the European Financial Stability Facility (EFSF) / European Stability Mechanism (ESM) support to the firms’ indebtness. Using dynamic panel data, three models were estimated and aimed at the determination of the way that EFSF/ESM financial assistance programs could influence the impact of five firm-specific characteristics, namely growth, profitability, size, tangibility and non-debt tax shield on the capital structure of European firms. Data from 2,086 firms for the period 2003 – 2016 were used, and two dummy variables; one for the EFSF/ESM support period and one for any kind of economic crisis period were formed. The results indicated that pecking order prevailed over trade-off theory. Economic crises did not affect severely the firm-characteristics’ effects, but the EFSF/ESM programs influence appeared in three cases. During the period of EFSF/ESM assistance, profitability’s negative effect on long-term debt ratio disappeared and on total debt ratio strengthened, growth’s positive impact on total debt ratio diminished and non-debt tax shield acquired positive influence on total debt ratio. These changes might be explained by the increased levels of tax rates and decreased levels of uncertainty that the EFSF/ ESM programs caused, as well as by the reluctance of lenders to provide new funds. UUM Press 2022 Article PeerReviewed application/pdf en cc4_by https://repo.uum.edu.my/id/eprint/29213/1/IJBF%2017%2001%202022%2081-108.pdf Chatzinas, Georgios and Papadopoulos, Symeon (2022) Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs. International Journal of Banking and Finance (IJBF), 17 (1). pp. 81-108. ISSN 2590-423X https://doi.org/10.32890/ijbf2022.17.1.4 |
| spellingShingle | HG Finance Chatzinas, Georgios Papadopoulos, Symeon Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs |
| title | Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs |
| title_full | Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs |
| title_fullStr | Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs |
| title_full_unstemmed | Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs |
| title_short | Determinants of The Capital Structure of European Firms: The Moderating Role of EFSF/ESM Financial Assistance Programs |
| title_sort | determinants of the capital structure of european firms the moderating role of efsf esm financial assistance programs |
| topic | HG Finance |
| url | https://repo.uum.edu.my/id/eprint/29213/1/IJBF%2017%2001%202022%2081-108.pdf |
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