Firm-specific determinants of capital structure – case of firms in Bosnia and Herzegovina
Džemal Bijedić University of Mostar, Bosnia and Herzegovina
This paper explores relative importance of some firm-specific determinants of leverage for the firms in Bosnia and Herzegovina. In order to explore which determinants are important and what is the nature of their influence, data on firms listed in two stock exchanges in Bosnia and Herzegovina for 5 years period were taken. The effect of tangibility, profitability, firm’s size, non-debt tax shield and growth on leverage was tested. The results show statistically significant positive influence of tangibility and non-debt tax shield on firms’ leverage and negative effect of size which is opposite to results for other transition economies. The results of regression models also show that significance of some factors and nature of their influence differs for firms listed in different stock exchanges.
Keywords: capital structure; leverage; firm-specific determinants; transition economies