Economics and Business Review

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Volume 8 (22) Number 1 pp. 24-49

Leszek Czerwonka1, Jacek Jaworski2

1Faculty of Economics, University of Gdańsk
2
Department of Finance, Faculty of Management and Finance, WSB University in Gdańsk

Capital structure and its determinants in companies originating from two opposite sides of the European Union: Poland and Portugal

Abstract:

The aim of the paper is to identify differences in enterprises’ capital structure
and its determinants in Poland and Portugal. The research applies statistical methods
to the financial data of 22,775 Polish enterprises and 36,625 Portuguese enterprises
for the years 2010–2017. The research results show that: (i) despite several years of ongoing
economic integration in the EU differences in enterprises’ capital structure in
old and new countries of the community still exist, (ii) in Portugal representing the
old EU enterprises are more likely to use debt than in Poland being an emerging EU
economy, (iii) in Polish enterprises, tangibility, profitability, liquidity and non-debt tax
shield exert a negative impact on debt; while growth and size have a positive impact;
in Portugal tangibility and a non-debt tax shield show the opposite, (iv) in both countries
industry growth decreases indebtedness of enterprises while financial risk results
in higher debt; in addition, in Portugal the capital intensity of industry increases the
share of debt in capital structure.

Keywords: capital structure, financial decisions of enterprises, Poland, Portugal

DOI: 10.18559/ebr.2022.1.3

For citation:

MLA Czerwonka, Leszek, and Jacek Jaworski. "Capital structure and its determinants in companies originating from two opposite sides of the European Union: Poland and Portugal." Economics and Business Review EBR 22.1 (2022): 24-49. DOI: 10.18559/ebr.2022.1.3
APA Czerwonka, L., & Jaworski, J. (2022). Capital structure and its determinants in companies originating from two opposite sides of the European Union: Poland and Portugal. Economics and Business Review EBR 22(1), 24-49 DOI: 10.18559/ebr.2022.1.3
ISO 690 CZERWONKA, Leszek, JAWORSKI, Jacek. Capital structure and its determinants in companies originating from two opposite sides of the European Union: Poland and Portugal. Economics and Business Review EBR, 2022, 22.1: 24-49. DOI: 10.18559/ebr.2022.1.3