An Empirical Analysis of the Determinants of Short- and Long-term Leverage of the Finnish Listed Companies
Gadish, Adi (2018)
Gadish, Adi
Jyväskylän ammattikorkeakoulu
2018
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2018061814047
https://urn.fi/URN:NBN:fi:amk-2018061814047
Tiivistelmä
Reaching an optimal capital structure is a goal for every business. In order to reach that goal, companies issue debt. The aim of this study is to examine whether tangibility, R&D expenditure, market value and the presence of financial experts on boards of directors influence firm’s leverage. The analysis was performed on Finnish listed companies between the years 2013-2016 based on firm-level secondary data. The main objective was to determine whether the corporate capital structure is affected by the aforementioned determinants.
Theoretical and empirical literature was collected from diverse literature including corporate reports, academic journals and research articles. Secondary data was collected from official databases and company’s financial statements. SPSS software performed both the descriptive, correlational and regression analyses using the data in order to identify causal relationships between the variables.
The results revealed that tangible assets support both short- and long-term debt, as supported by prior studies. R&D expenditure has been long known to support long-term debt, and the results of this study supported that claim. On the other hand, R&D expenditure is known not to be as an ideal determinant of short-term debt, and the results support this conclusion.
Furthermore, the results have indicated that large corporations have fairly easy access to both short- and long-term debt, as supported by prior studies. Lastly, the presence of financial experts on boards of directors revealed not to be a determinant of both short- and long-term debt. This result is opposed to prior studies that have shown that financial experts significantly affect the finance and investment policies.
Theoretical and empirical literature was collected from diverse literature including corporate reports, academic journals and research articles. Secondary data was collected from official databases and company’s financial statements. SPSS software performed both the descriptive, correlational and regression analyses using the data in order to identify causal relationships between the variables.
The results revealed that tangible assets support both short- and long-term debt, as supported by prior studies. R&D expenditure has been long known to support long-term debt, and the results of this study supported that claim. On the other hand, R&D expenditure is known not to be as an ideal determinant of short-term debt, and the results support this conclusion.
Furthermore, the results have indicated that large corporations have fairly easy access to both short- and long-term debt, as supported by prior studies. Lastly, the presence of financial experts on boards of directors revealed not to be a determinant of both short- and long-term debt. This result is opposed to prior studies that have shown that financial experts significantly affect the finance and investment policies.