The role of financial factors interactions in the capital structure determination

Journal of Corporate Finance Research. 2016. No. 1(37). P. 102–118.

Полякова М. В., Поляков К. Л.

This article is devoted to the exploration of the mechanism of making decision about the company’s financing structure. It is shown that the interaction between various financial characteristics of company plays statistically significant role in the capital structure determination. Namely their possible values space may be split into several areas in which different, but might intersected, sets of financial indicators impact statistically significant on the capital structure. Moreover, the same indicator in different areas may have a differential impact on the capital structure. Also there were formulated several hypothesis about the potential direction of influence of various financial indicators on the capital structure assuming the truth of pecking order or trade off hypotheses. And one of the accompanying results of research was the getting facts in favor of the packing order theory for the companies in the chosen branch. Regression trees in combination with linear regression models were used to build the corresponding model of statistical relationship between the measure of capital structure and the set of company’s financial indicators. Model training and testing of the set of hypothesis were done using data about annual Russian companies reporting in the branch of automobile retail.

Ключевые слова: структура капитала, capital structure, regression tree, structural change model, interaction of variables, automobile retail, регрессионное дерево, модель с переменной структурой