The Influence of Capital Structure on Baltic Corporate Performance
Journal of Business Economics and Management 2011
Jūlija Bistrova, Nataļja Lāce, Valentina Peleckienė

Seeking for the optimal capital structure lasts for more than 50 years and still is very topical, especially during the market turmoil as it happened in 2008. No perfect answer is yet provided to the question of how large debt amount should be kept on the accounts. The main objective of the present paper is to analyze the impact of Capital structure decisions on the equity performance and on the profitability of the companies located in Baltics. The study covered the time period of 4 years (from 2007 till 2010) and the sample data of 36 “blue-chip” companies listed on the Baltic Stock exchanges. The results of the study discover positive relationship between stock performance and sufficiency of equity capital. Besides, there was found an inverse relationship between the level of debt and capital profitability confirming the pecking order theory that in the best case the company should use self-generated funds.


Keywords
capital structure, capital profitability, stock returns, debt level
DOI
10.3846/16111699.2011.599414
Hyperlink
http://www.tandfonline.com/doi/abs/10.3846/16111699.2011.599414

Bistrova, J., Lāce, N., Peleckienė, V. The Influence of Capital Structure on Baltic Corporate Performance. Journal of Business Economics and Management, 2011, Vol.12, No.4, pp.655-669. ISSN 1611-1699. e-ISSN 2029-4433. Available from: doi:10.3846/16111699.2011.599414

Publication language
English (en)
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