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Market Performance and Capital Structure of the Companies Listed on the Warsaw Stock Exchange in Poland

Majerowska, Ewa; Gostkowska-Drzewicka, Magdalena

Abstract:
The purpose of this study is to examine the effect capital structure has on the market performance of the companies listed on the Warsaw Stock Exchange in Poland in 2000–2015 as well as to present the empirical evidence of its significance using a panel data approach. The study was based on data obtained from the annual financial statements contained in the Notoria database and published on the Warsaw Stock Exchange. We used Tobin’s Q ratio and the market value of equity to book value of equity (MBVR) as the measure of corporate performance. When Tobin’s Q was modelled, the level of leverage proved to be significant. It means that the company’s capital structure affects its performance. The sign between both variables, LEVERAGE and Tobin’s Q, is positive which is in line with trade-off theory. The dynamic panel data modelling approach allowed the conclusion that, irrespective of the measure selected (Tobin’s Q or the MBVR), the value of the measure depends positively on its value in the previous year. It means that a high performance noted in a previous year constitutes the basis for good results in the following year.

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Verlagsausgabe §
DOI: 10.5445/KSP/1000085951/16
Veröffentlicht am 11.12.2019
Cover der Publikation
Zugehörige Institution(en) am KIT Institut für Informationswirtschaft und Marketing (IISM)
Publikationstyp Zeitschriftenaufsatz
Publikationsjahr 2018
Sprache Englisch
Identifikator ISSN: 2363-9881
KITopen-ID: 1000100816
Erschienen in Archives of Data Science, Series A (Online First)
Band 4
Heft 1
Seiten A16, 24 S. online
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