Year of Graduation
The Influence of Relation-oriented Investments on Company`s Capital Structure
This paper aims to find an empirical proof of relation-oriented investments’ effect on capital structure choice in developing countries. Relations with three groups of stakeholders were analyzed namely employees as strong internal stakeholders, consumers and suppliers as key external ones. The hypothesis is that relation-oriented investments influence financial leverage directly, that tested by Weighted Least Squares (cross-sectional weights). Special database was collected and it includes information about BRICS companies operating in electronics or producing technological equipment. The result is negative influence of relation-oriented investments on financial leverage that is consistent with predictions and previous research.