Taking into consideration the assumptions behind classical capital structures on the one hand and the specific economic environment and the resulting behavior of firms in the emerging European economies on the other hand, it is clear that these extraordinary circumstances (different political and economic systems) influence the determination of the firms’ capital structures in these countries in a special way. The goal of this paper is to determine the driving factors for different capital structure choices in emerging European economies, compared to the one we can see for instance in Western European countries. As a result of the underlying research on this topic and also considering the fact that shareholders are slowly gaining influence in businesses in emerging European economies (like Slovenia), the financial principal behavior of these companies will probably remain different from those in mature market economies. One of the most interesting findings regarding the research topic is probably the fact that we can find a re-designed Pecking Order Theory in some Eastern and Central European (CEE) economies.
Inhaltsverzeichnis (Table of Contents)
- ABSTRACT
- INTRODUCTION
- LITERATURE REVIEW
- EXISTING THEORIES
- MM THEORY
- TRADE OFF THEORY
- PECKING ORDER THEORY
- FREE CASH FLOW THEORY
- SPECIALTIES IN EMERGING ECONOMIES
- CAPITAL STRUCTURE DEPARTS FROM THE CLASSICAL MODEL IN EMERGING EUROPEAN ECONOMIES
- SPECIALTIES WITHIN THE ECONOMIC ENVIRONMENT AND EXPLANATIONS FOR DIFFERENT CAPITAL STRUCTURES
- REFLECTION ON SELECTED CAPITAL STRUCTURE RESEARCH IN CEE COUNTRIES
- PREFERRED CAPITAL STRUCTURE CHOICE IN CEE COUNTRIES
- IMPLICATIONS OF THE CAPITAL STRUCTURE CHOICE
- CONCLUSION
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to identify the driving factors influencing capital structure choices in emerging European economies, specifically focusing on the differences compared to Western European countries. The paper considers how the unique political and economic environment affects capital structure decisions in these emerging markets. It also explores the influence of shareholder power and how the financial behavior of companies in emerging markets may differ from those in mature economies. The key themes examined in the paper include:- The impact of specific economic environments on capital structure decisions in emerging European economies.
- The role of classical capital structure theories in explaining the behavior of firms in emerging markets.
- The emergence of a revised Pecking Order Theory in certain Central and Eastern European (CEE) economies.
- The influence of shareholder power on capital structure choices in emerging markets.
- The implications of capital structure decisions for companies operating in emerging European economies.
Zusammenfassung der Kapitel (Chapter Summaries)
- ABSTRACT: This section provides an overview of the paper's main focus, highlighting the differences between capital structure choices in emerging European economies and those observed in mature markets. It underscores the influence of unique political and economic circumstances on the capital structure of firms in these emerging markets.
- INTRODUCTION: This chapter introduces the concept of capital structure and emphasizes the need for entrepreneurs and managers to make strategic decisions regarding investment and financing. It focuses on the selection of value-creating projects and the design of an optimal capital structure, especially within the context of emerging European economies.
- LITERATURE REVIEW: This chapter presents a review of the key literature on capital structure theory. It discusses the "M&M capital structure irrelevance proposition" and its role in shaping modern capital structure theory. It also acknowledges the differences in research and understanding of capital structure choices between developed and emerging European countries.
- EXISTING THEORIES: This chapter provides a brief overview of classical capital structure theories, including the MM Theory, Trade-off Theory, Pecking Order Theory, and Free Cash Flow Theory. It explains the functionality of these theories in the contemporary business world.
- SPECIALTIES IN EMERGING ECONOMIES: This chapter focuses on the specific challenges and opportunities related to capital structure in emerging European economies. It discusses the deviations from the classical model, the influence of the economic environment on capital structure decisions, and the implications of capital structure choices for companies operating in these markets.
Schlüsselwörter (Keywords)
The central keywords and focus topics of this paper are: capital structure, emerging European economies, economic environment, classical capital structure theories, MM Theory, Trade-off Theory, Pecking Order Theory, Free Cash Flow Theory, shareholder power, financial behavior, Central and Eastern European (CEE) economies, corporate finance, investment decisions, financing sources, debt financing, equity financing, optimal capital structure, value creation, business environment, financial distress, bankruptcy costs, tax benefits.- Arbeit zitieren
- Master of Science in Management Swen Beyer (Autor:in), 2010, Capital Structure - Specifics in Emerging European Economies, München, GRIN Verlag, https://www.grin.com/document/152750
