Sovereign Debt and Corporate Capital Structure: The Evidence from Selected European Countries During the Global Financial and Economic Crisis

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216305%3A26510%2F17%3APU123573" target="_blank" >RIV/00216305:26510/17:PU123573 - isvavai.cz</a>

Result on the web

<a href="http://dx.doi.org/10.3846/btp.2017.002" target="_blank" >http://dx.doi.org/10.3846/btp.2017.002</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.3846/btp.2017.002" target="_blank" >10.3846/btp.2017.002</a>

Result language

angličtina

Original language name

Sovereign Debt and Corporate Capital Structure: The Evidence from Selected European Countries During the Global Financial and Economic Crisis

Original language description

The recent Global financial crisis and the following European debt crisis show the significance of country financial stability and its impact on the private sector. Moreover, the sovereign debt as an essential element of government macroeconomic policy influences the financial performances of the companies and their future development and growth. The capital structure and financing decisions represent one of the most significant parts of company’s financial policy and its key to financial strength. There are a lot of external factors influencing the capital structure; however, due to the European debt crisis the aim of this study is to indicate the influence of sovereign debt on capital structure of the private held companies in different European countries. This study examines the evidence from European developed countries and emerging markets for the period 2005–2012, in order to compare the level of its impact on the capital structure according to the countries’ specifics. We find that after Global Financial Crisis the sovereign debt has tendency to increase in all investigated countries. Greece and Italy have the highest level of debt and it exceeds their Gross Domestic Product (GDP). In addition to that, the Czech Republic has the lowest level of sovereign debt to GDP, but at the same time the corporate capital structure exceeds 100%. The sovereign debt levels are strongly and statistically significantly correlated with each other, however, Hungarian debt has weaker relation with other countries. The fidings also show the integration and interdependence of European countries. Moreover, Hungarian, Czech and German private sectors are the most depended on the level of sovereign debt.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

—

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2017

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Business: Theory and Practice

ISSN

1648-0627

e-ISSN

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Volume of the periodical

2017

Issue of the periodical within the volume

18

Country of publishing house

LT - LITHUANIA

Number of pages

11

Pages from-to

14-24

UT code for WoS article

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EID of the result in the Scopus database

2-s2.0-85032448059