Capital Structure - Specifics in Emerging European Economies
GRIN Verlag, Jun 30, 2010 - 36 pages
Seminar paper from the year 2010 in the subject Business economics - Investment and Finance, grade: 1,5, European School of Business Reutlingen, course: Lecture, language: English, abstract: Taking into consideration the assumptions behind classical capital structures on the one hand and the specific economic environment and the resulting behavior of firms in the emerging European economies on the other hand, it is clear that these extraordinary circumstances (different political and economic systems) influence the determination of the firms' capital structures in these countries in a special way. The goal of this paper is to determine the driving factors for different capital structure choices in emerging European economies, compared to the one we can see for instance in Western European countries. As a result of the underlying research on this topic and also considering the fact that shareholders are slowly gaining influence in businesses in emerging European economies (like Slovenia), the financial principal behavior of these companies will probably remain different from those in mature market economies. One of the most interesting findings regarding the research topic is probably the fact that we can find a re-designed Pecking Order Theory in some Eastern and Central European (CEE) economies.
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akademische Texte Asymmetric information bankruptcy costs bankruptcy risk Berk Beyer Capital Structure Brealey and Myers Brounen and Eichholtz businesses capital structure choice capital structure theories Cash flow theory CEE countries choices in emerging classical capital structure companies Crnigoj and Dušan different Capital Structures driving Dušan Mramor 2009 economic system Eichholtz 2001 emerging European countries emerging European economies employee-governed behavior employee-governed enterprises employee-governed firms enterprise value European CEE European Economies GRIN experts Faleye financial distress firm’s follow the goal Franco Modigliani Free Cash flow goal of maximizing GRIN Verlag Hawawini and Viallet insider owners International Corporate Finance investment investors lower leverage managers Matjaž Crnigoj mature market economies maximize wages maximizing shareholders Merton Miller Modigliani and Merton optimal capital structure Pecking Order Theory probably remain different Slovenia and Hungary Slovenian firms social ownership Specifics in Emerging structure theories especially Swen Beyer Capital tax shield thinking on capital trade-off trade-off theory Tradeoff theory