The Determinants of Capital Structure: Evidence from companies listed on the WIG20 index of the Warsaw Stock of Exchange

Objectives The aim of the article is to help financial analysts and managers to determine appropriate choices regarding capital structure matters which are relevant for the development of their considered companies. Material and methods In this article, the panel data analysis was used, in order to investigate the relationship between the choice of the structure of the capital and elements related to financial statements of selected polish companies of the WIG20 index. Results Evidences from the article generally suggests the relevance of the pecking order hypothesis in explaining the financing choices of Polish firms. Companies have some preferences regarding their financing. Conclusions The article also emphasized that capital structure choice may be the result of a complex interaction of many institutional features and business practices that are not fully captured by differences in the legal systems, which is especially important such as Poland where the legal system is quickly changing due to new politicians at the head of the state. All industry variable coefficients are statistically important and do confirm differences in capital structure among industries. This a topic which can be covered within a future article.