Determinants of the Capital Structure of Oil and Gas Companies

This study was aimed at finding the main factors determining the capital structure of oil and gas companies. The ambiguity in assessing the influence of various factors on the capital structure of the company served as the initial impetus for the present study, and it is this problem that it is intended to solve. The topic of the capital structure of oil and gas companies has not been studied much, and existing works, as a rule, have discrepancies in the results and models used by researchers that do not take into account any specific industry factors. Ordinary least squares regression (OLS) with fixed effects for the company was chosen as the research method to determine if there is a correlation between the dependent variable (leverage) and the independent variables (profitability, company size, possible growth of the company, tangibility of assets, non-debt tax shield, liquidity, market to book ratio and dividend payment). The representative sample consists of 61 oil and gas companies with a total number of observations of 1159 over the period from 2001 to 2019. It was established that profitability, liquidity, non-debt tax shield, market-to-book value indicator and dividend payment are negatively associated with leverage, while tangibility, possible growth and size are positively associated with leverage. Our hypothesis that in developed countries oil and gas companies use leverage more than in developing countries has not been confirmed. The research consists of the introduction, three chapters and conclusion.