Subject. This article examines the relationship between the capital structure and the performance of companies in Russia. Objectives. The article aims to identify and analyze of the nature of the capital structure impact on the operational efficiency of enterprises in Russia for 2020–2022. Methods. For the study, we used a panel regression equation. Results. Using the panel regression method, we tested the hypothesis that an increase in the debt level leads to a decrease in the company's performance. The results of the study refute the hypothesis that an increase in the debt level has a positive effect on the company's performance in the subsequent period. Conclusions and Relevance. The conclusions of this study coincide with the results in developed capital markets and are also consistent with the conclusions obtained in the Egyptian market. At a low level, debt can play a constructive role in performance improving, providing companies with additional resources to invest in development and therefore, increasing their competitiveness. The results of the study can be used to predict and determine the capital structure, which is important for the top management of Russian companies, members of the board of directors, financial analysts and other stakeholders.
Keywords: capital structure, company's performance, debt level
References:
Modigliani F., Miller M.H. The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 1958, vol. 48, no. 3, pp. 261–297. URL: Link
Myers S.C. The Capital Structure Puzzle. The Journal of Finance, 1984, vol. 39, no. 3, pp. 575–592. URL: Link
Jensen M.C., Meckling W.H. Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 1976, vol. 3, iss. 4, pp. 305–360. URL: Link90026-X
Frank M.Z., Goyal V.K. Testing the Pecking Order Theory of Capital Structure. Journal of Financial Economics, 2003, vol. 67, iss. 2, pp. 217–248. URL: Link00252-0
Campello M. Debt Financing: Does It Boost or Hurt Firm Performance in Product Markets? Journal of Financial Economics, 2006, vol. 82, iss. 1, pp. 135–172. URL: Link
Hennessy C.A., Whited T.M. Debt Dynamics. The Journal of Finance, 2005, vol. 60, iss. 3, pp. 1129–1165. URL: Link
Antoniou A., Guney Y., Paudyal K. The Determinants of Capital Structure: Capital Market-Oriented versus Bank-Oriented Institutions. Journal of Financial and Quantitative Analysis, 2008, vol. 43, iss. 1, pp. 59–92. URL: Link
Huang G., Song F.M. The Determinants of Capital Structure: Evidence from China. China Economic Review, 2006, vol. 17, iss. 1, pp. 14–36. URL: Link
Frank M.Z., Goyal V.K. Capital Structure Decisions: Which Factors are Reliably Important? Financial Management, 2009, vol. 38, iss. 1, pp. 1–37. URL: Link
Baker M., Wurgler J. Market Timing and Capital Structure. The Journal of Finance, 2002, vol. 57, no. 1, pp. 1–32. URL: Link
Flannery M.J., Rangan K.P. Partial Adjustment toward Target Capital Structures. Journal of Financial Economics, 2006, vol. 79, iss. 3, pp. 469–506. URL: Link
Wahba H. Capital Structure, Managerial Ownership and Firm Performance: Evidence from Egypt. Journal of Management & Governance, 2014, vol. 18, pp. 1041–1061. URL: Link
Dawar V. Agency Theory, Capital Structure and Firm Performance: Some Indian Evidence. Managerial Finance, 2014, vol. 40, iss. 12, pp. 1190–1206. URL: Link
Majumdar S.K., Chhibber P. Capital Structure and Performance: Evidence from a Transition Economy on an Aspect of Corporate Governance. Public Choice, 1999, vol. 98, pp. 287–305. URL: Link
Ilyukhin E. The Impact of Financial Leverage on Firm Performance: Evidence from Russia. Korporativnye finansy = Corporate Finance, 2015, vol. 9, no. 2, pp. 24–36. URL: Link
Capobianco H.M.P., Fernandes E. Capital Structure in the World Airline Industry. Transportation Research Part A: Policy and Practice, 2004, vol. 38, iss. 6, pp. 421–434. URL: Link
Vătavu S. The Impact of Capital Structure on Financial Performance in Romanian Listed Companies. Procedia Economics and Finance, 2015, vol. 32, pp. 1314–1322. URL: Link01508-7
Thi Phuong Vy L., Thi Bich Nguyet P. Capital Structure and Firm Performance: Empirical Evidence from a Small Transition Country. Research in International Business and Finance, 2017, vol. 42, pp. 710–726. URL: Link
Daskalakis N., Agios D., Dalla V. The Behaviour of SMEs' Capital Structure Determinants in Different Macroeconomic States. Journal of Corporate Finance, 2017, vol. 46, pp. 248–260. URL: Link
