Revista Egitania Sciencia - Volume 4 | ARTICLE

Title: DETERMINANT FACTORS OF CAPITAL STRUCTURE: AN APPLICATION TO THE PORTUGUESE MARKET

Author: Gualter Couto * (gcouto@uac.pt) e Victor Chissingui **(victorchissingui58@hotmail.com)

Publication: Revista Egitania Sciencia - Volume 4

Abstract:
This paper employs the models of trade-off and pecking order using a panel data of nonfinancial firms in the Portuguese market over a time period of 10 years (1996/2005), by means of the estimation method of generalized least squares (GLS). It’s found that the debt attributes used in this paper were found to reflect the utmost importance in determining the capital structure, disregarding the economic risk (volatility) factor, since the results obtained are not supported by the current financial literature. The results obtained suggest that tangibility assets, growth assets and profitability are negatively related to debt. In turn, the factors firm’s size, non-debt tax shields and liquidity have an inverse relationship towards the first three attributes.

Keywords: Capital Structure, pecking order model, trade-off model, determinant factors




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