DETERMINANTS OF CAPITAL STRUCTURE OF CROATIAN ENTERPRISES BEFORE AND DURING THE FINANCIAL CRISIS

This paper analysis capital structure determinants of Croatian enterprises based on a cross-sectional data for pre-recession 2007 and recession 2010 comprising about 10,000 firms. Determinants are selected with reference to the relevant capital structure theories and include asset tangibility, profitability, firm size and business risk. The results indicate highly positive significant impact of tangibility and negative significant impact of profitability on financial leverage in both observed years. Firm size seems to be statistically significant at higher level in crisis period, but at the same time no relationship can be found between business risk and financial leverage that is of economic significance.