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Finance and Sustainability pp 59–67Cite as

A Size of a Company as a Determinant of Capital Structure: Comparison of Listed Companies in the European Union

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Abstract

The aim of the study was to investigate the role of a company size as a determinant of debt structure among capital markets with higher and lower capitalization in relation to the gross domestic product (GDP). Capital markets with the higher indicator relation were categorized as developed markets (higher than the median) while the ones with the lower relation as emerging markets. The paper presents research results regarding debt structure in European construction companies. This industry is essential for the economy because it delivers buildings and infrastructure for society and for other branches as well. Furthermore, it affects employment and economic growth. A high level of debt characterizes a construction sector. The period of a study cover years 2010–2015. Data were analysed according to descriptive statistics, the Spearman’s correlation, and the Mann-Whitney U-test. To assess the capital structure different measures were used. The study confirmed that there is a statistically significant difference in examined relationship between emerging and developed financial markets. The size of a company differentiates the relationship between a capital structure and the growth of debt much stronger on emerging than on developed ones.

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Notes

  1. 1.

    European Commission (2016) Brochure—The European construction sector—A global partner http://ec.europa.eu/DocsRoom/documents/15866/attachments/1/translations. Accessed 26 Sept 2017

  2. 2.

    European Commission (2017) https://ec.europa.eu/growth/sectors/construction_pl. Accessed 26 Sept 2017

  3. 3.

    Enterprise Value is calculated as market capitalization minus cash and equivalents plus preferred equity, minority interest and total debt

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Authors and Affiliations

  1. Warsaw University of Life Sciences, Warszawa, Poland

    Aneta Kalisiak

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  1. Aneta Kalisiak
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Correspondence to Aneta Kalisiak .

Editor information

Editors and Affiliations

  1. Corporate Finance and Public Finance, Wrocław University of Economics, Wrocław, Poland

    Agnieszka Bem

  2. Corporate Finance and Public Finance, Wrocław University of Economics, Wrocław, Poland

    Karolina Daszyńska-Żygadło

  3. Department of Management, University of Economics Prague, Jindřichův Hradec, Czech Republic

    Taťána Hajdíková

  4. Department of Investments and Corporate Finance, Corvinus University of Budapest, Budapest, Hungary

    Péter Juhász

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Kalisiak, A. (2018). A Size of a Company as a Determinant of Capital Structure: Comparison of Listed Companies in the European Union. In: Bem, A., Daszyńska-Żygadło, K., Hajdíková, T., Juhász, P. (eds) Finance and Sustainability. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-92228-7_6

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