The Relationship between Capital Structure Choice and Firm's Profitability: Evidence from Bosnia and Herzegovina

Konferenzbeitrag

This research is designed to examine the relationship between the capital structure and profitability of non-financial firms in Bosnia and Herzegovina during the period of ten years, from 2003-2012. The goal is to prove the existence of the relationship between the firm's capital structure choice and its profitability. The analysis is extended by including the debt structure and differentiating between the types of debt such as the long-term and the short-term ones. The results of the multivariate canonical correlation analysis provide support to a hypothesis that the capital structure and profitability have statistically significant relationships. Furthermore, the findings provide support that firms develop different patterns of profitability depending on the capital structure choice. We found that an increasing proportion of short-term debt and long-term debt in the overall liability of the firm reduces its profitability.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: In: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Kotor, Montengero, 10-11 September 2015 ; Year: 2015 ; Pages: 179-185 ; Zagreb: IRENET - Society for Advancing Innovation and Research in Economy

Classification and Topics

• Classification: Wirtschaft ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Multiple or Simultaneous Equation Models; Multiple Variables: Other
• Subject: Capital Structure ; Debt Level ; Profitability ; Canonical Correlation Analysis

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Resić, Emina ; Mangafić, Jasmina ; Perić, Tunjo
• Event: Veröffentlichung
• (who): IRENET - Society for Advancing Innovation and Research in Economy
• (where): Zagreb
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/183646
• Last update: 10.03.2025, 11:43 AM CET