Determinants of capital structure of enterprises - evidence from Poland

The aim of the paper was to examine the factors influencing capital structure of enterprises based on the trade-off and pecking order theories. We tested whether company size, age, tangibility of assets, non-interest tax shield, profitability and opportunities for growth have any impact on debt ratio, which is measured as the proportion of short and long-term debt relative to total assets. The study was conducted on the basis of 3441 companies operating in Poland, for the years 2010 to 2013, thereby giving more than 10 thousand company-years of observation. The inference was obtained using the OLS method. We found that age, profitability, non-debt tax shield, and size are negatively related to debt ratio, whereas the proportion of tangible assets within total assets and the number of shareholders are both factors that increase the intensity of employing debt in financing.