Determinants of Long-Term and Short-Term Debt Financing: Evidence from Poland

The study attempts to extend the knowledge with debt structure and its determinants in Poland. We compared the results we achieved with the results of studies conducted elsewhere in the world. The analysis covered a group of 111 companies listed on the Warsaw Stock Exchange over the period 2002-2012. The study demonstrates that tangibility is the strongest determinant of debt structure of companies included in the analysis. We found statistically significant, positive relation between tangibility and the propensity to raise long-term debt and statistically significant negative relation for short-term debt. The study gives the evidence of significant relationship between the size and propensity to raise debt as well. No statistically significant relation between the profitability of enterprises and debt was found, while it was confirmed in other studies available across the world. It can attest to the fact that the analysed companies use debt for tax purposes. We also demonstrated negative relationship between the variable that describes a firm's growth and short-term debt. We found that Polish companies make their economic decisions using similar grounds as in the countries of mature market economies. No emerging market specifics is primarily caused by the situation on the Polish debt market which is generally dominated by banks controlled by foreign investors.