University of Twente Student Theses
Firm Characteristics and Capital Structure : Exploring the Determinants of Financing Choices in European Markets
Alikouzay, Z. (2023) Firm Characteristics and Capital Structure : Exploring the Determinants of Financing Choices in European Markets.
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| Abstract: | This thesis examines the relationship between firm characteristics and capital structure using a dataset of 218 firms listed on the STOXX EUROPE 600 INDEX during the period of 2014-2019. Three measures of capital structure, namely total debt (TD), long-term debt (LTD), and short-term debt (STD), are utilized as dependent variables, while eight firm characteristic measures (including profitability (PROF), size (SZ), growth opportunity (GROW), asset tangibility (TANG), non-debt tax shield (NDTS), volatility (VOL), liquidity (LIQ), and age (AGE) are considered as independent variables. The findings demonstrate that firm characteristics such as size, profitability, tangibility, NDTS, volatility, and liquidity significantly influence the choice of capital structure, determining whether firms finance through debt or equity. However, growth opportunities do not emerge as a significant predictor of leverage ratios across the models or quantiles examined. Furthermore, the analysis reveals that age does not impact the capital structure variables of firms listed on the STOXX EUROPE 600 INDEX. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | Business Administration MSc (60644) |
| Link to this item: | https://purl.utwente.nl/essays/95162 |
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