Macroeconomic factors' impact on the capital structure of Portuguese non-financial firms

• Autor(a) principal: Reis, Gabriela Garcês
• Data de Publicação: 2019
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/19150
• topic: Macroeconomic variables; Determinants; Capital structure; Portuguese industry; Non-financial firms; Variáveis macroeconómicas; Determinantes; Estrutura de capital; Indústria portuguesa; Empresas não-financeiras

The present Dissertation mainly addresses the impact of macroeconomic factors on the Portuguese non-financial firms’ capital structure. More specifically, this empirical Dissertation’s objective is to understand and establish a link between the stylised facts on capital structure and the level of borrowed funding, namely through the critical analysis of four leverage ratios, of the Portuguese corporate sector. The present study was developed using firm and macroeconomic data for the period of 2008 to 2017. The Dissertation’s main findings suggest that the firms’ profitability, cost of Portuguese government bonds and cost of new loans operations present mainly an inverse relationship with the firms’ leverage. Contrary to our expectations, the average rate on which individual firms are taxed on their earned income presents a weak negative impact on the firms’ leverage ratios. Firms’ external financing, according to our results, is positively influenced by the increase on the general price level of goods and services. The increase on the economy growing rate has a negative impact on the firms’ short-term debt-to-assets ratio but a positive one with the long-term debt-to-assets ratio. Moreover, the model predicts that an increase on the Portuguese government debt has a positive effect on the amount of the firms’ total liabilities and long-term debt. However, the increase in government debt causes a small reduction on the amount of firms’ short-term debt. All our results were found to be strongly statistically significant.