Analysis of the Impact of the Economic Policy Uncertainty on Profitability and Capital Structure Based on the Example of Russian and European Companies

The final qualification work is devoted to the analysis of the influence of the economic policy uncertainty on the profitability and the capital structure on the example of the most capitalized companies in Russia and Germany during the period 2003-2017. The influence on the general debt and profitability of companies is considered, the analysis of the results and differences between German and Russian companies is conducted. To study the impact of economic uncertainty most widely, the uncertainty index of economic policy, developed by Baker et al., (2012), is used. The first chapter deals with theories and empirical studies on the structure of capital and its main determinants. The second chapter is devoted to the study of the uncertainty index of economic policy and the sample of the study. The assumptions of theories about the nature of the influence of factors on dependent variables have been singled out and hypotheses have been put forward about this issue. In the third chapter the regression models on the debt load and the profitability of Russian and German companies are constructed. The results of the research show that the uncertainty of economic policy adversely affects both the financial leverage and the profitability of the company in Russia and Germany. In addition, the influence of the traditional determinants of the capital structure is considered, and the results are correlated with theories of capital structure and previous studies. Many hypotheses have been confirmed,the main point is that the uncertainty exerts stronger influence on Russian companies than on German companies.