Debt policy of companies in Czech Republic

Information
Title: Debt policy of companies in Czech Republic
Issue: Vol. 12, No 3, 2019
Published date: 09-2019 (print) / 09-2019 (online)
Journal: Journal of International Studies
ISSN: 2071-8330, eISSN: 2306-3483
Authors: Lenka Strýčková
Technical University of Liberec
Keywords: Czech Republic, debt policy, capital structure determinants, company, financing
DOI: 10.14254/2071-8330.2019/12-3/15
DOAJ: https://doaj.org/article/10cf880ba4b94c3c87b5ebdd5e4c99ee
Language: English
Pages: 183-197 (15)
JEL classification: G32
Website: https://www.jois.eu/?545,en_debt-policy-of-companies-in-czech-republic
File https://www.jois.eu/files/15_835_Stryckova.pdf
Licenses:
Abstract

The attitude of companies towards the use of debt depends on many factors that can be generally called corporate debt policy. This paper deals with the debt policy of companies in Czech Republic, focusing on the factors affecting the appropriate amount of debt and their debt policy in general. The aim of this contribution is to reveal the dominant factors affecting companies in their debt policy decisions and to analyse the possible impact of the selected classifying factors on the firms’ responses. The findings of this article are based on the data from the questionnaire survey conducted in 2016 and the subsequent statistical analysis of the responses. The most important factors affecting appropriate amount of debt proved to be financial flexibility and volatility of earnings and cash flows. For deciding on debt policy, the most important factor was insufficiency of internal funds. Statistical analysis revealed several differences in response to debt-policy questions according to the legal form of business, the industrial sector, the company size, and the origin of capital.

Bibliography

1. Archbold, S., & Lazaridis, I. (2010). Capital structure decisions and decision making: survey evidence from the UK and Greece. In: Seventeenth Annual Conference of the Multinational Finance Society. Spain: Barcelona.

2. Bancel, F., & Mittoo, U. R. (2004). Cross-Country Determinants of Capital Structure Choice: A Survey of European Firms. Financial Management, 33(4), 103-132. Available at SSRN: https://ssrn.com/abstract=594781

3. Benetti, C., & Decourt, R., & Terra, P. (2007). The practice of corporate finance in Brazil and in the USA: comparative survey evidence. Anais: VII Encontro Brasileiro de Finanças. São Paulo.

4. Brounen, D., de Jong, A., & Koedijk, K. (2006). Capital structure policies in Europe: Survey evidence. Journal of Banking. 30(5), 1409-1442.

5. Cwynar, A., Cwynar, W., & Dankiewicz, R. (2015). Studies of Firm Capital Structure Determinants in Poland: an Integrative Review. Financial Internet Quarterly “e-Finanse”, 11(4), 1-22. doi: 10.14636/1734-039X_11_4_001

6. Dvorský, J., Schönfeld, J., Kotásková, A., & Petráková, Z. (2018). Evaluation of important credit risk factors in the SME segment. Journal of International Studies, 11(3), 204-216. doi:10.14254/2071-8330.2018/11-3/17

7. Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: evidence from the field. Journal of Financial Economics. 60(2-3), 187-243.

8. Khan, M. Y. & Jain, P. K. (2007). Basic Financial Management. New Delhi: Tata McGraw-Hill Education.

9. Ključnikov, A., & Belás, J. (2016). Approaches of Czech Entrepreneurs to Debt Financing and Management of Credit Risk. Equilibrium. Quarterly Journal of Economics and Economic Policy, 11(2), 343-365. doi: http://dx.doi.org/10.12775/EQUIL.2016.016

10. Kohli, A. & Sharma, J. K. (2015). Survey of Corporate Financial Behavior of Indian MNCs. International Journal of Finance & Accounting Studies. 3(1), 12-27. doi:10.7575/aiac.ijfas.v.3n.1p.12

11. Kozubíková, L., Belás, J., Bilan, Y., & Bartoš, P. (2015). Personal characteristics of entrepreneurs in the context of perception and management of business risk in the SME segment, Economics and Sociology, 8(1), 41-54. doi: 10.14254/2071- 789X.2015/8-1/4

12. Krauseová, J. (1995). Analýza kapitálové struktury českých firem. Finance a úvěr. 45(9), 481-491.

13. Landa, M., & Martinovičová, D. (2010). Přístupy k hodnocení změn kapitálové struktury průmyslových odvětví. Acta Universitatis agriculturae et silviculturae Mendelianae Brunensis. 58(6), 259-267.

14. Mateev, M., Poutziouris, P., & Ivanov, K. (2013). On the determinants of SME capital structure in Central and Eastern Europe: A dynamic panel analysis. Research in International Business and Finance, 27, 28-51. doi: https://doi.org/10.1016/j.ribaf.2012.05

15. Miller, M. H., & Modigliani, F. (1958). The Cost of Capital, Corporation Finance, and the Theory of Investment. American Economic Review, 48(3) 261-297.

16. Neumaierová, I., & Neumaier, I. (1996). Úvaha o optimální zadluženosti. Finance a úvěr. 46(1), 51-61.

17. Prášilová, P. (2012). Determinanty kapitálové struktury českých podniků. E M. Ekonomie a Management: Economics and Management. 15(1), 89-104.

18. Ruslan, A., Hájková, D., & Kubicová, I. (2015). The Impact of Monetary Policy on Financing of Czech Firms. Finance a úvěr. 65(6), 455-476. Available at SSRN: https://ssrn.com/abstract=2856957

19. Steklá, J., et al. (2015). Evaluation of Capital Structure of Agricultural Cooperatives. Agris on-line Papers in Economics and Informatics. 7(3), 37-48.

20. Strýčková, L. (2017). The practice of capital structure choice in the Czech Republic: A comparative study based on the global data. Journal of International Studies, 10(2), 185-203. doi:10.14254/2071-8330.2017/10-2/14