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Capital structure decisions for financially constrained firms: A pre- and post-crisis analysis

Cempírek, Petr LU and Gruncharov, Georgi LU (2016) NEKN02 20161
Department of Economics
Abstract
The presented thesis focuses on dynamics of capital structure decisions of financially constrained and unconstrained firms listed on Stockholm Stock Exchange. It examines the effect of the global financial crisis on the corporate financing decision. The first chapter introduces the topic, discusses its importance and outlines the contribution to the empirical research. The second chapter the relevant literature is reviewed in two parts – the general capital structure theories and the theory regarding financially constrained firms. The third chapter clarifies the approach taken to answer the research questions the thesis aims to answer, together with description of data and variables used. It also addresses the problem of constraint... (More)
The presented thesis focuses on dynamics of capital structure decisions of financially constrained and unconstrained firms listed on Stockholm Stock Exchange. It examines the effect of the global financial crisis on the corporate financing decision. The first chapter introduces the topic, discusses its importance and outlines the contribution to the empirical research. The second chapter the relevant literature is reviewed in two parts – the general capital structure theories and the theory regarding financially constrained firms. The third chapter clarifies the approach taken to answer the research questions the thesis aims to answer, together with description of data and variables used. It also addresses the problem of constraint identification. The fourth chapter then discusses the results obtained from the available dataset. We find that six capital structure determinants are sufficient to explain most of the variation of the corporate capital structure. We provide evidence that the recent global financial crisis had a mild effect on Stockholm-listed companies in terms of capital structure. Further, we discover a change in the capital structure of the firms in the sample during the crisis with no reversion to the pre-crisis values. We identify and contrast significant differences in the behavior of constrained and unconstrained firms. Finally, we conclude the paper by emphasizing the key empirical findings on the selected sample of listed and delisted Swedish companies for the period 2003-2014. (Less)
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author
Cempírek, Petr LU and Gruncharov, Georgi LU
supervisor
organization
course
NEKN02 20161
year
type
H1 - Master's Degree (One Year)
subject
keywords
capital structure, financial constraints, global financial crisis, leverage
language
English
id
8877672
date added to LUP
2016-06-13 14:16:57
date last changed
2016-06-13 14:16:57
@misc{8877672,
  abstract     = {The presented thesis focuses on dynamics of capital structure decisions of financially constrained and unconstrained firms listed on Stockholm Stock Exchange. It examines the effect of the global financial crisis on the corporate financing decision. The first chapter introduces the topic, discusses its importance and outlines the contribution to the empirical research. The second chapter the relevant literature is reviewed in two parts – the general capital structure theories and the theory regarding financially constrained firms. The third chapter clarifies the approach taken to answer the research questions the thesis aims to answer, together with description of data and variables used. It also addresses the problem of constraint identification. The fourth chapter then discusses the results obtained from the available dataset. We find that six capital structure determinants are sufficient to explain most of the variation of the corporate capital structure. We provide evidence that the recent global financial crisis had a mild effect on Stockholm-listed companies in terms of capital structure. Further, we discover a change in the capital structure of the firms in the sample during the crisis with no reversion to the pre-crisis values. We identify and contrast significant differences in the behavior of constrained and unconstrained firms. Finally, we conclude the paper by emphasizing the key empirical findings on the selected sample of listed and delisted Swedish companies for the period 2003-2014.},
  author       = {Cempírek, Petr and Gruncharov, Georgi},
  keyword      = {capital structure,financial constraints,global financial crisis,leverage},
  language     = {eng},
  note         = {Student Paper},
  title        = {Capital structure decisions for financially constrained firms: A pre- and post-crisis analysis},
  year         = {2016},
}