Abstract:

The main aim of the paper is to study the relationships between companies’ financing structure and selected microeconomic (company-specific) determinants. For the purposes of the study, the author chose Manufacturing, one of the most important sections of the economy. The study focuses on two groups of European Union countries representative of two different economic systems from the second half of the twentieth century. This additionally enabled the author to examine whether the differences were a factor differentiating the impact of the researched determinants on these companies’ financing structure. The first group of countries comprises six member states from the "old" European Union (Germany, France, United Kingdom, Spain, Italy and Sweden), and the second consists of companies from six "new" member states (Poland, Czechia, Hungary, Romania, Slovakia, Bulgaria). The strength of the research is the use of a relatively large research sample of 64,585 enterprises spanning the period between 2012 and 2020. The research was conducted on the basis of data from the Orbis database. A single-factor linear panel model was used in the study to verify its hypotheses. In addition to the classic determinants of the financing structure, the model uses a new variable expressing a relative change in working capital. The research confirmed the hypotheses and conclusions drawn in other studies and capital structure theories. It showed a positive relationship between financing structure and company size as well as the ratio of short-term liabilities to current assets. On the other hand, asset structure, profitability and non-interest tax shield proved to be determinants exerting a negative impact on the financing structure.