DP1392 | The Capital Structure of Firms in Central and Eastern Europe

Publication Date

31/05/1996

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Abstract

According to more recent theories on the optimal capital structure, the availability of external financing is not always guaranteed, or it may come at different costs, depending on the methods of financing used (debt vs. equity, long-term debt vs. short-term debt, etc.). Under such circumstances, firms? investment and financing decisions are interdependent. This paper studies the optimal capital structure for enterprises in transition economies and investigates the actual capital structure and its determinance in Hungary and Poland.