Leverage and Macroeconomic Determinants: Evidence from Ukraine
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Date
2019-08
Authors
Deari, Fitim
Matsuk, Zoriana
Мацук, Зоряна Андріївна
Мацук, Зоряна Андреевна
Lakshina, Valeriya
Journal Title
Journal ISSN
Volume Title
Publisher
Walter de Gruyter
Abstract
Viewed retrospectively since the work of Modigliani and Miller (M&M, 1958), the capital
structure still remains a matter of study. The capital structure issue then is examined from different
perspectives, and thus intertwining firms and macroeconomic determinants. Studies were focused to
examine the relationship between leverage ratios and macroeconomic environment. Motivated from
what was done earlier, we try to bring in this study evidence as well. Thus, totally 49 Ukrainian firms
are selected and data are examined from 2012 to 2016. The paper is aimed at studying the process
of leverage adjusting by examining five firm’s characteristics and three macroeconomic
determinants. We found that leverage is influenced significantly from both, firm characteristics and
macroeconomic determinants. The study provides evidence those firms with higher tax shield,
tangibility, net trade credit, and profitability used more leverage than counterparties. Firm’s size and
inflation are confirmed as insignificant determinants. On the other hand, GDP growth rate and default
spread are confirmed to play a role on leverage policies.
Description
Keywords
Leverage, Determinants, Macroeconomics
Citation
Fitim D. Leverage and Macroeconomic Determinants: Evidence from Ukraine / Deari Fitim, Matsuk Zoriana, Lakshina Valeriya // Studies in Business and Economics. – 2019. – Vol. 14, Iss. 2. – P. 5–19.