CEEAplA Working Paper Series 2016

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Estrutura de capital e rendibilidade das 100 maiores empresas dos Açores
Publication . Teixeira, João; Aguiar, Ângela de Fátima Reis
This paper investigates the determinants of capital structure of Azorean firms, using panel data from a sample of 279 firms, across 8 industries, between 1984 and 2012. We examine which firm-specific and market factors affect the debt ratio of these firms, comparing the predictions of the trade-off and the pecking order theories of capital structure. Furthermore, we analyze whether there are differences in firms’ debt levels across islands, the periods when the Azores received funds from the European Union and the industry to where the firms belongs. In parallel, we explore which firms have emerged and which firms have lost importance in the ranking of the 100 biggest firms of the Azores. The estimation results of the capital structure model reveal that the debt ratio depends on firm’s profitability, size, growth opportunities and rotation ratio, as well as on the GDP growth and inflation rates. The results suggest that the debt level is affected by the firm’s location, the period when the Azores received funds from the European Union and the industry to where the firm belongs. Finally, we find that the composition of the ranking of the 100 biggest firms in the Azores has changed significantly during the last three decades.
2016-12Working paper Open access Show more