INFLUENCE OF CERTAIN FACTORS ON CAPITAL STRUCTURE OF CONSTRUCTION COMPANIES

Abstract

Capital structure refers to a combination of debt and equity that companies use to finance their operations. It determines the balance between the risk and return for shareholders and affects the company's financial stability and cost of capital. The subject of this study includes a sample of 42 construction companies operating in the Serbian market observed in the period from 2006 to 2023. In order to analyze the effects of selected variables on the level of debt, three dependent variables were used in the form of indicators of total debt, short-term debt, and long-term debt of companies. The aim of the study is to understand the effects and significance of the impact of selected microeconomic and macroeconomic variables on the level of indebtedness of businesses. The analysis includes the use of static and dynamic econometric models to analyze panel data. The results indicated the statistical significance of variables such as liquidity, profitability, tangibility, tax shield and gross domestic product on th