Abstract:

The aim of this study is to investigate the influence of capital structure on the companies’ financial performance, on a database consisting of 466 companies from the pharmaceutical sector in Europe and in the United States of America, over a period of 10 years, from 2012 to 2021. There were estimated unbalanced panel data multiple regression models, with no effects, with fixed effects and with random effects. The dependent variables used as a measure of companies' financial performance are indicators expressed in both accounting values and market values, while the independent variables are indicators reflecting indebtedness, liquidity, taxation, dividend distribution policy and company size. The research results highlighted a positive or negative impact of the factorial variables on the financial performance of companies, validating most of the previous research studies. Regarding capital structure, there was illustrated a negative impact of indebtedness on Return on Assets and Return on Equity, respectively a positive influence on Price Earnings Ratio.