The impact of high-tech companies' performance and growth on capital structure

Spitsin V., Vukovic D. B., Spitsina L., ÖZER M.

COMPETITIVENESS REVIEW, cilt.32, sa.6, ss.975-994, 2022 (ESCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 32 Sayı: 6
  • Basım Tarihi: 2022
  • Doi Numarası: 10.1108/cr-03-2021-0042
  • Dergi Adı: COMPETITIVENESS REVIEW
  • Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), Scopus, Academic Search Premier, ABI/INFORM, Aerospace Database, Business Source Elite, Business Source Premier, Communication Abstracts, EconLit, Educational research abstracts (ERA), INSPEC, Metadex, Public Affairs Index, Civil Engineering Abstracts
  • Sayfa Sayıları: ss.975-994
  • Anahtar Kelimeler: Russia, Panel data, Capital structure, Companies' performance, High-tech companies, C1, C5, G32, O32, EMPIRICAL-ANALYSIS, LEVERAGE, PROFITABILITY, DYNAMICS, FIRMS
  • Anadolu Üniversitesi Adresli: Evet

Özet

Purpose The purpose of this paper is to investigate the joint influence of two factors (companies' performance and growth) on the company's capital structure and to determine the conditions for financially sustainable competitive strategies in the coordinates profitability and growth. Design/methodology/approach The study sample includes 1,996 companies from 6 high-tech industries in Russia (panel data: 7,984 observations). The authors use regression models with random effects and carry out a three-dimensional visualization of the resulting dependencies. Findings The study found that profitability improves the capital structure (reduces the share of borrowed capital) and, on the contrary, the growth of companies (assets growth or sales growth) increases the leverage ratio. In the case of assets growth, the combined influence of two factors reduces the negative effect of assets growth. The results have shown that the outstripping growth of most high-tech companies requires an increase in debt capital and deterioration in the capital structure and financial stability. Practical implications In general, based on the results of this study, the authors have identified groups of fast-growing companies that need financial support, and have defined the main areas of impact (reducing the loan burden and increasing profitability) that will allow these companies to maintain high growth rates and demonstrate advanced development. Originality/value The relationships (which the authors identified between the control variables, the studied variables and leverage) were obtained for the first time for a sample of companies in high-tech industries and services in bigger transition country (Russia).