Abstract:

The objective of this article is to review the literature on the problem of capital structure, analysing in particular the interconnection between financing decisions of companies and the importance of the financial system of countries. The first papers to document this link were the Rajan and Zingales (1998), De Miguel and Pindado (2001), and Antoniou et al. (2008) studies, which explained differences in the capital structure of firms based on differences inherent in the specific characteristics of the financial system present in each country. More recently, the studies by Bertero (1994), Schmidt et al. (2001), Hartman et al., (2003), Murinde et al. (2004), Schmidt and Hackethal (2004), Mylonidis, Kollias (2010), Bruno et al. (2012), Kılınç et al. (2017), Barucci and Colozza (2018) and Kristofik et al. (2020), have analysed the possibility of convergence of financial systems in terms of the patterns of firms' choice of funding sources in different countries. The various studies indicate that the capital structure is influenced by the concept of the financial system, where financial intermediaries play a key role in reducing transaction costs and information costs, and the efficiency of capital markets contributes to reducing the information costs of the hierarchy of the firm's financing sources.