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Determinants of Capital Structure: Evidence from the Global Renewable Energy Sector

Mitreva, Eliza LU and Georgiev, Biser LU (2015) BUSN89 20151
Department of Business Administration
Abstract
The main purpose of this master thesis is to determine the factors that significantly influence the capital structure decisions in the global renewable energy sector during the period 2005-2013.This study is implemented through a quantitative approach, using a panel data model, in which leverage is the dependent variable, controlled by a set of firm-specific, industry-specific, tax-related and macroeconomic independent variables.
Our regression analysis reveals that the determinants which are positively and significantly correlated with leverage are size,tangibility and median industry leverage. We find that profitability,market-to-book assets, SG&A expenses to revenues, dividends to assets, listed firms dummy and common law dummy are in... (More)
The main purpose of this master thesis is to determine the factors that significantly influence the capital structure decisions in the global renewable energy sector during the period 2005-2013.This study is implemented through a quantitative approach, using a panel data model, in which leverage is the dependent variable, controlled by a set of firm-specific, industry-specific, tax-related and macroeconomic independent variables.
Our regression analysis reveals that the determinants which are positively and significantly correlated with leverage are size,tangibility and median industry leverage. We find that profitability,market-to-book assets, SG&A expenses to revenues, dividends to assets, listed firms dummy and common law dummy are in negative and significant relation with leverage. Overall, the global financial crisis did not have a strong impact on the majority of determinants affecting capital structure decisions in the studied sector. Our results are consistent with the framework of the dynamic trade-off theory. (Less)
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author
Mitreva, Eliza LU and Georgiev, Biser LU
supervisor
organization
course
BUSN89 20151
year
type
H1 - Master's Degree (One Year)
subject
keywords
pecking order theory, trade-off theory, leverage, renewable energy companies, Capital structure determinants
language
English
id
7442849
date added to LUP
2015-06-29 13:37:01
date last changed
2015-06-29 13:37:01
@misc{7442849,
  abstract     = {The main purpose of this master thesis is to determine the factors that significantly influence the capital structure decisions in the global renewable energy sector during the period 2005-2013.This study is implemented through a quantitative approach, using a panel data model, in which leverage is the dependent variable, controlled by a set of firm-specific, industry-specific, tax-related and macroeconomic independent variables.
Our regression analysis reveals that the determinants which are positively and significantly correlated with leverage are size,tangibility and median industry leverage. We find that profitability,market-to-book assets, SG&A expenses to revenues, dividends to assets, listed firms dummy and common law dummy are in negative and significant relation with leverage. Overall, the global financial crisis did not have a strong impact on the majority of determinants affecting capital structure decisions in the studied sector. Our results are consistent with the framework of the dynamic trade-off theory.},
  author       = {Mitreva, Eliza and Georgiev, Biser},
  keyword      = {pecking order theory,trade-off theory,leverage,renewable energy companies,Capital structure determinants},
  language     = {eng},
  note         = {Student Paper},
  title        = {Determinants of Capital Structure: Evidence from the Global Renewable Energy Sector},
  year         = {2015},
}