WHAT AFFECTS THE FINANCIAL STRUCTURE OF FIRMS IN THE ICT INDUSTRY IN SELECTED EUROPEAN COUNTRIES

Abstract

: During its life cycle, a company needs different amounts of funds, which can come from different entities. Each company has a specific structure of funding sources with respect to geographical and industry affiliation. The size of the company also has an impact on the structure of these sources. There is a number of determinants that affects the financial structure which is why a universal recommendation cannot be found. Thanks to these facts, more and more research has been created for over half a century. However, it is not possible to focus on individual companies and so compare different industries and economies. This research expands knowledge in the industry of information and telecommunication technologies in the countries of the extended Visegrád Group (V4 plus Austria, Bulgaria, Romania, Slovenia). Medium and (very) large companies during the period 2010–2018 are analysed. The aim of this research is to determine whether profitability, liquidity, asset structure, GDP growth rate, inflation rate and reference interest rate affect the level of total, long-term and short-term debt. The Generalized Method of Moments was chosen to determine these impacts. The main conclusion is that without regard to the size, the level of debt is most affected by determinants that represent the external environment of companies with the level of the reference interest rate having the most significant impact. Therefore, when optimizing and creating the financial structure, companies should take this factor into account and monitor the central bank’s comments on the future development of this interest rate.