Scholarly record
CORPORATE INVESTMENT DECISIONS: EMPIRICAL EVIDENCE FROM THE CZECH REPUBLIC
Abstract
The aim of this article is to track the process of a corporate capital structure creation, and more specifically it is focused on the investment decisions as the preceding step thereof. The final corporate capital structure depends generally on a large variety of determinants, and the chosen investment decisions are formed by the firm's individual decisions. What are the real motives and causes behind the firm's investment decisions? The empirical research attempts to answer this question, which is concerned with internal factors determining the corporate capital structure in the financial literature. The research findings are based on the questionnaire survey performed amongst companies in the Czech Republic and the subsequent data analysis. The statistical methods and procedures were used for the research evaluation. Results of the empirical questioning show that most companies monitor the debt-to-equity ratio, they rely primarily on the internal sources of financing, and they expect that their capital structure remains constant even in the near future. The inquiry also revealed that the Czech companies like to use various methods for their investment decisions, from which the payback period, and the profitability index prevail. Generally, the major respondents of the research, the medium-sized companies, have conservative attitude towards debt financing. Their decisions are in accordance with the pecking-order theory, in which firms consider their own resources (equity and profit) as primary source of financing, and they start considering the debt financing only in case of their shortage.
Publication Impact Profile
Publication details
References11
Antoniou, A., Et Al. The Determinants Of Capital Structure: Capital Market-Oriented Versus Bank-Oriented Institutions, Journal Of Financial And Quantitative Analysis, United States, Vol. 43/Issue 1, Pp 1-41, 2008.
Hojná, R. & Strýčková, L. Is There A Space For An Innovative Approach To Sources Of Business Financing In The Czech Republic? Proceedings Of The 11th International Conference Liberec Economic Forum, Technical University Of Liberec, Czech Republic, 1st Ed, Pp 522 – 531, 2013.
Graham, J.R. & Harvey, C.R. The Theory And Practice Of Corporate Finance: Evidence From The Field, Journal Of Financial Economics, United States, Vol 61, Pp 187-243, 2001.
Bancel, F. & Mittoo, U.R. Cross-Country Determinants Of Capital Structure Choice: A Survey Of European Firms, Financial Management, United States, Vol. 33/Issue 4, Pp 103-132, 2004.
Brounen, D. & De Jong, A. & Koedijk, K. Capital Structure Policies In Europe: Survey Evidence, Journal Of Banking And Finance, Netherlands, Vol. 30/Issue 5, Pp 1409-1442, 2006.
Beattie, V. & Goodacre, A. & Thomson, S.J. Diversity And Determinants Of Corporate Financing Decisions: Survey Evidence, British Accounting Review, United Kingdom, Pp 28, 2004.
Bauer, P. Determinants Of Capital Structure: Empirical Evidence From The Czech Republic, Finance A Úvěr. Charles University In Prague, Czech Republic, Vol. 54/ Issue 1/2, Pp 2-21, 2004.
Prášilová, P. Determinanty Kapitálové Struktury Českých Podniků, E A M: Ekonomie A Management, Czech Republic, Vol. 15/Issue 1, Pp 89-104, 2012.
Hrdý, M. & Horová, M. Aktuální Problémy Strategického Finančního Řízení Podniků V Čr, E A M: Ekonomie A Management, Czech Republic, Vol. 4/Issue 1, Pp. 80-86, 2007.
Švecová, L. & Scholleová, H. & Fotr, J. Vybrané Aspekty Investičního Rozhodování (Poznatky Z Empirických Výzkumů), E A M: Ekonomie A Management, Czech Republic, Vol. 15/Issue 3, Pp. 125-141, 2012.
Jáčová, H. & Horák, J. & Brabec, Z. New Management Systems And Their Application Through Erp Systems In The Czech Republic, Proceedings Of The 11th International Conference Liberec Economic Forum, Technical University Of Liberec, Czech Republic, 1st Ed, Pp 231 – 239, 2013.
View or Download full articleAccess options
SWS access login
Login as SWS Scientific CommitteeLogin as SWS Scientific PartnerLogin as SWS AuthorAuthors and approved SWS contributors will read and export their own linked papers after identity matching by SWS profile, email and SGEM GlobalID.
For librarian assistance: [email protected]
Purchase Instant Access
- Article can be downloaded after successful payment.
- Article may be used according to SWS library access terms.
- Article cannot be redistributed.
