Title: Are there differences in the use of debt capital in enterprises of different size?

Authors: Petra Růčková; Daniel Stavárek

Addresses: Department of Finance and Accounting, School of Business Administration in Karvina, Silesian University in Opava, Univerzitní náměstí 1934/3, Karviná 73340, Czechia ' Department of Finance and Accounting, School of Business Administration in Karvina, Silesian University in Opava, Univerzitní náměstí 1934/3, Karviná 73340, Czechia

Abstract: The paper deals with the influence of selected determinants on the rate of external financing sources use. The reason for issuing this topic is the fact that the literature declares different opportunities for funds being drawn from the financial market by enterprises of different size. The aim of this paper is, based on the chosen determinants, to assess whether there exist differences in debt capital usage as it comes to chosen enterprises of different size in CEE countries. Emphasis is placed on the differences between medium-sized and large-sized enterprises. The analysis involves an impact of capital price, total rate of return and fixed assets ratio on debt usage expressed by debt/equity ratio. As for methodology, the panel regression by GMM method is used. The results of the analysis show the preference of the pecking order theory for large enterprises. For medium-sized enterprises, the results were not clear.

Keywords: financial sources; capital structure; enterprise size; capital price; ROA; return on assets; fixed assets; GMM method.

DOI: 10.1504/IJMEF.2020.107698

International Journal of Monetary Economics and Finance, 2020 Vol.13 No.2, pp.163 - 176

Received: 28 Nov 2019
Accepted: 25 Feb 2020
Published online: 08 Jun 2020 *

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