THE DETERMINATION OF FINANCIAL STRUCTURE IN AGRICULTURE, FORESTRY AND FISHING INDUSTRY IN SELECTED COUNTRIES OF CENTRAL AND EASTERN EUROPE

58 2021, XXIV, 3 Business Adminis a ion and Managemen 10.15240/ ul/001/2021-03-004 THE DETERMINATION OF FINANCIAL STRUCTURE IN AGRICULTURE, FORESTRY AND FISHING INDUSTRY IN SELECTED COUNTRIES OF CENTRAL AND EASTERN EUROPE Pe a Růčko á1, Nicole Škuláňo á2 1 Silesian Uni e si y in Opa a, School o Business Adminis a ion in Ka iná, Depa men o Finance and Accoun ing, Czech Republic, ORCID: 0000-0001-8558-6212, [email p o ec ed]; 2 Silesian Uni e si y in Opa a, School o Business Adminis a ion in Ka iná, Depa men o Finance and Accoun ing, Czech Republic, ORCID: 0000-0003-3715-0988, [email p o ec ed]. Abs ac : E e y economic sec o , e e y single indus y, e e y economy, and e en e e y i m has i s speci ic inancial s uc u e. Gi en ha i is no possible o examine housands o indi idual companies o scien i ic pu poses, i is necessa y o a leas examine he di e ences be ween indi idual sec o s, indus ies and coun ies. A he same ime, he o ma ion and op imiza ion o he inancial s uc u e is in luenced by a my iad o di e se ac o s ha inancial manage s should ake in o accoun in hei decisions. Thanks o hese ac s, mo e and mo e esea ches had been c ea ed o o e hal a cen u y. This esea ch expands knowledge in se en selec ed coun ies o Cen al and Eas e n Eu ope – he Viseg ád G oup, Bulga ia, Slo enia and Romania. The aim o he esea ch is o e alua e, based on he Gene alized Me hod o Momen s, he ela ionship be ween he six selec ed ac o s and he indeb edness le el in companies belonging o he ag icul u al, o es y and ishing indus y. The subjec o he esea ch is medium, la ge and e y la ge companies du ing he yea s 2009 o 2016. The esea ch deals wi h he in luence o p o i abili y, liquidi y, asse s uc u e, economic de elopmen , in la ion and in e es a es on he o al, long- e m and sho - e m indeb edness o companies. The main inding o he esea ch is ha companies a e in luenced by bo h in e nal and ex e nal de e minan s. Howe e , e en hough he indus y should be neu al, ex e nal de e minan s – GDP g ow h a es, in la ion a es and in e es a es – ha e a mo e signi ican impac on he deb le el. The esul s o his esea ch will no only ex end cu en knowledge in he ield o co po a e inance, bu a he same ime, he esul s may be s imula ing in se ing suppo ules o public adminis a ion and e en Eu opean ins i u ions, as he selec ed indus y is s ongly linked o subsidy policies. Keywo ds: Financial s uc u e, p o i abili y, liquidi y, non-deb ax shield, asse s uc u e, GDP, in la ion, in e es a e. JEL Classi ica ion: G32. APA S yle Ci a ion: Růčko á, P., & Škuláňo á, N. (2021). The De e mina ion o Financial S uc u e in Ag icul u e, Fo es y and Fishing Indus y in Selec ed Coun ies o Cen al and Eas e n Eu ope. E&M Economics and Managemen , 24(3), 58–78. h ps://doi.o g/10.15240/ ul/001/2021-03-004 In oduc ion E e y company needs inancial esou ces o i s business ac i i ies be o e i s es ablishmen and du ing i s exis ence. Fo accoun ing pu poses, hese unds a e a anged in he balance shee , in which hey o m a pa called he capi al o EM_3_2021.indd 58 8.9.2021 9:57:48 59 3, XXIV, 2021 Business Adminis a ion and Managemen inancial s uc u e, which, including bo h long- e m and sho - e m sou ces o unding, is he subjec o his esea ch. In addi ion o he ime s uc u e, he inancial s uc u e is u he di ided in o equi y and deb sou ces o inancing. The ques ion ha economis s ha e been ying o answe o mo e han hal a cen u y is “wha he igh a io o equi y and deb sou ces o unding is?” We could ind s udies o a ious yea s, such as Modigliani and Mille (1963), B adley e al. (1984), Bokpin (2009), O lo a e al. (2020), Růčko á and S a á ek (2020) o Jin (2021). Un o una ely, e en in such a long ime, no answe has been ound, because he balance o unding sou ces is in luenced by a numbe o ac o s and he e o e, coun less s udies dealing wi h his issue a e s ill being published. In iew o his ac , he e is no gene al heo y o capi al s uc u e, as s a ed by Mye s (2001). Gi en he numbe o known and e en unknown ac o s, i is impo an o con inue o pay a en ion o his a ea and examine o he samples o companies om a ious coun ies and indus ies. Indeed, p e ious esea ches show ha he esul s a y widely due o he size o he companies, he indus y, he coun y and he sample size. All hese ac s became a mo i a ion o p o ide his esea ch conside ing ag icul u e, o es y and ishing indus y in se en selec ed coun ies o Cen al and Eas e n Eu ope. Knowledge in he ield o capi al/ inancial s uc u e o be dissemina ed o gi en economies should become he main bene i o his esea ch as hose coun ies a e no so o en examined. The dissemina ion o knowledge lies in he ac ha he selec ed coun ies a e examined indi idually om he pe spec i e o gi en indus y, which is no a ma e o cou se as he au ho s o en c ea e one panel composed o di e en coun ies, esul s o which canno be applied o all coun ies in he sample. This p ocedu e can be ound, o example, in Klappe e al. (2002), He nádi and O mos (2010), Jõe ee (2013), and Ma ee e al. (2012). A he same ime, he selec ed indus y is e y o en no he subjec o esea ch. Th ee s udies ha e been ound, which a e connec ed o a selec ed sec o – P ášilo á (2012), Aulo á and Hla sa (2013), Sik eland and Zhang (2020). Companies a e also di ided by size in o medium and la ge ones b inging hus a posi i e aspec o he esea ch as he di e en impac s o de e minan s can be possibly seen. Las bu no leas , his esea ch examines a la ge sample o companies, in o al 10,644 o hem. I mus be said ha un o una ely no all companies a e aken om he da abase as some companies had ze o o undisclosed da a. Finally, his esea ch should desc ibe he beha iou o companies in he indus y in each economy. And he e o e, he esul s o his esea ch may be s imula ing in se ing suppo ules o public adminis a ion and e en Eu opean ins i u ions, as he selec ed indus y is s ongly linked o subsidy policies. In a his o ical poin o iew, as w i en abo e, his issue has been discussed o o e hal a cen u y. The basic and ini ial s udy o his a ea is conside ed o be “The Cos o Capi al, Co po a ion Finance and he Theo y o In es men ” o 1958 by Modigliani and Mille . Two basic heo ies o capi al s uc u e eme ged ou o his s udy – ade-o heo y and pecking o de heo y. B ealey e al. (2011) and ade-o heo y seek he op imum o capi al s uc u e h ough a balance be ween he ax ad an age o deb and he cos o inancial dis ess. Mye s (1984) and pecking o de heo y c ea e a hie a chy o unding sou ces wi h he conclusion ha equi y should be p e e ed o deb . Many o he s udies we e based on hese wo heo ies, and i ually all esea ches e lec ion, builds on, and expands on hese h ee esea ches – Modigliani and Mille (1958), Mye s (1984), and B ealey e al. (2011). As he numbe o s udies has g own, he numbe o known de e minan s, coun ies and indus ies has g own as well. This pape is o ganized as ollows. Sec ion 1 de ines ea lie esea ches on he inancial s uc u e and selec ed de e minan s sugges ed by his s udy. Sec ion 2 p esen s he esea ch me hodology, da a, and a iables and p o ides wi h he cha ac e iza ion o indus y and examined economies. Sec ion 3 desc ibes he esul s o he analysis o a iable dependencies using panel eg ession. Sec ion 4 p esen s he conclusions. 1. Li e a u e O e iew As al eady indica ed in he in oduc ion, he o ma ion and op imiza ion o he company inancial s uc u e is qui e a demanding ac i i y due o he numbe o ac o s in luencing he decisions made by he inancial manage s. Usually, hese de e minan s a e di ided in o hose gi en by company’s in e nal en i onmen and hose coming om he ex e nal en i onmen . Bo h o hese g oups a e EM_3_2021.indd 59 8.9.2021 9:57:48 60 2021, XXIV, 3 Business Adminis a ion and Managemen ep esen ed in his esea ch. In a-company de e minan s a e ep esen ed by company p o i abili y, liquidi y and asse s uc u e. Non- co po a e de e minan s a e ep esen ed by he de elopmen o he GDP g ow h a e, he in la ion a e and he le el o he basic in e es a e o he gi en economy. The ollowing sec ion will g adually men ion he assump ions ela ed o each ac o as well as p e ious s udies dealing wi h hem. Be o e he li e a u e o e iew, i should be men ioned ha all de e minan s can ha e a posi i e and nega i e impac on he deb le el. The posi i e impac o p o i abili y on he indeb edness le el is p omo ed by he ade- o heo y (B ealey e al., 2011), which says ha i companies a e mo e p o i able, hei inancial dis ess cos s dec ease educing he likelihood o bank up cy and making companies sui able o g an ing a loan. This ela ion has been con i med by, e.g., Klappe e al. (2002), Pinko á (2012), Aulo á and Hla sa (2013) o ag icul u al en e p ises and Mokho a and Zinecke (2013) in Slo enia. On he con a y, he nega i e impac o p o i abili y is suppo ed by pecking o de heo y (Mye s, 1984) saying ha as p o i s g ow, so do o he pa s o i such as e ained ea nings, which a e a e y cheap means o inancing. This link is a mo e common in p e ious esea ches. The nega i e link also p e ails when deb s a e di ided in o o al, long- e m and sho - e m ones. This ela ion was no ed, o example, by Ni o ozhkin (2005), Weill (2004), Č nigoj and M amo (2009), He nádi and O mos (2010), Hanousek and Shamshu (2011), Ma ee e al. (2012), Mokho a and Zinecke (2013), P ędkiewicz and P ędkiewicz (2015), Růčko á (2015b) o Poland and Slo akia, Hang e al. (2018), Yildi im e al. (2018), Bilgin (2019), Mo adi and Paule (2019), O lo a e al. (2020), Touil and Mamoghli (2020), Sik eland and Zhang (2020), and Jin (2021). The posi i e ela ionship be ween liquidi y and indeb edness is explained by he ac ha i he company is hi by an un a ou able si ua ion, i can sell highly liquid asse s and hus su i e he bad pe iod. Howe e , in o de o sell such asse s, i should possess o some amoun o such asse s o such a case. Illiquid asse s a e di icul o sell and hei sale is loss-making. These asse s usually include ixed asse s. The u hs should apply ha liquid asse s a e inanced by deb , illiquid by equi y. This ela ion is suppo ed by he esul s o , e.g., Ma ee e al. (2012) as o long- e m deb , Růčko á (2015b) in he Czech Republic, Ramli e al. (2019) o Indonesia. A nega i e impac can be caused by a po en ial con lic be ween manage s and owne s; i manage s could eely dispose o he company’s asse s, hey could exp op ia e he owne s by g adual sale. This ela ionship is suppo ed by Lipson and Mo al (2009), Ma ee e al. (2012) o sho - e m deb , Pinko á (2012), Aulo á and Hla sa (2013), Růčko á (2015b) in Poland and Slo akia, Bilgin (2019), Ramli e al. (2019) o Malaysia. The s uc u e o asse s has an impac on deb acco ding o i s composi ion. A posi i e link is expec ed o long- e m deb and a nega i e one is expec ed o sho - e m deb . These expec a ions ha e been e ealed by, e.g., Ma ee e al. (2012), P ášilo á (2012), Mokho a and Zinecke (2013) in Bulga ia, Hunga y and Slo enia, Hang e al. (2018), Sik eland and Zhang (2020). These expec a ions a e gi en by a a iable ep esen ing his de e minan . Usually i is he a io o angible and o al asse s. Tangible asse s a e ixed asse s ha can be used as colla e al when applying o a loan. Howe e , he e a e se e al pi alls ha dis up hese expec ed links. The i s one, he o ien a ion o he gi en economy inancial sys em is as hese links apply only in a bank-o ien ed sys em as he pledge canno be used on he inancial ma ke s, as s a ed by, e.g., Acedo-Rami ez and Ruiz-Cabes e (2014). The size o he company is he second di icul y because a la ge numbe o angible asse s should be a ailable o medium-sized and especially la ge companies as s a ed by Klappe e al. (2002), Daskalakis e al. (2017) and Lou enço and Oli ei a (2017). The las p oblem is he indus y unde s udy; indus ies wi h a la ge amoun o s ocks, such as ag icul u e, canno use s ocks as colla e al as con i med by he esul s o , e.g., Aulo á and Hla sa (2013) and Růčko á (2015a). The posi i e impac o economic de elopmen on he indeb edness le el can be explained by he ac ha i he economy h i es, co po a e p o i s usually inc ease, and in his case, we e u n o he explana ion as in p o i abili y h ough ade-o heo y. This link was con i med by, e.g., Gaju el (2006) o long- e m deb , Hanousek and Shamshu (2011) o unlis ed companies, Yinusa e al. (2017) o long- e m deb , Ramli e al. (2019) o Indonesia. On he o he hand, when he EM_3_2021.indd 60 8.9.2021 9:57:48 61 3, XXIV, 2021 Business Adminis a ion and Managemen economy is h i ing and p o i s a e g owing, pecking o de heo y can also be applied and a nega i e link can be assumed. This link can be ound, o example, in Gaju el (2006) o o al and sho - e m deb , Cheng and Shiu (2007), Bokpin (2009), Hanousek and Shamshu (2011) o lis ed companies, Jõe ee (2013) o unlis ed companies, Yildi im e al. (2018), Ramli e al. (2019) o Malaysia. The nega i e ela ionship be ween he in la ion a e and he deb a io is assumed o long- e m deb , as he in la ion a e should educe he al eady exis ing deb oge he wi h he decline in he eal in e es a e. This ela ionship can be ound, o example, in Gaju el (2006) as o o al indeb edness, Jõe ee (2013), Öz ekin (2015), Daskalakis e al. (2017), Bilgin (2019). A posi i e ela ionship be ween he in la ion a e and deb is expec ed only o sho - e m deb . This expec a ion is based on he ac ha when lowe ing he eal in e es a e, c edi o s can hedge hemsel es by e.g. linking he in e es a e o in la ion. Howe e , i is possible o secu e i in only he sho - e m pe iod. This ela ionship can be ound, o example, in Hanousek and Shamshu (2011), Yinusa e al. (2017), Ramli e al. (2019). The basic in e es a e is he las a iable. In his case, he impac on he deb le el is expec ed acco ding o he ma u i y o he economy. The assump ion is ha de eloped coun ies will show a posi i e bond and de eloping coun ies will show a nega i e bond. This ac is in luenced by he di e ence be ween hese coun ies in e ms o he quali y o ins i u ional, legal and egula o y en i onmen as epo ed by Yinusa e al. (2017). As i comes o he ex e nal ac o s, i should be men ioned ha a numbe o s udies ound some link, which was un o una ely no s a is ically signi ican . The e o e, i is e y impo an o include hese ac o s egula ly in s udies in o de o ob ain as many s a is ically signi ican esul s as possible. 2. Da a and Me hodology The subjec o his esea ch, companies classi ied acco ding o he NACE classi ica ion in sec ion A – Ag icul u e, o es y and ishing a e. The inpu ime se ies come om he O bis and Wo ld Bank da abases. A o al o 10,644 companies we e analyzed, o which 9,771 a e medium-sized and 873 a e la ge and e y la ge companies. Un o una ely, hese a e no all companies o he O bis da abase as some companies lacked some da a o he e we e o en ze o da a ound hus hese companies we e excluded. The analysis o sub-indus ies showed ha in almos all economies he sub- indus y C op and animal p oduc ion, hun ing and ela ed se ice ac i i ies domina es, in which 85% o medium-sized companies and 65% o la ge companies om he o al sample examined ope a e. Howe e , in panel eg ession analyses all hese sub-indus ies oge he o each coun y, as in some economies he e is only one o no company, and he e o e i would no be possible o examine he de e minan s o he impac on he inancial s uc u e. Resea ch seeks o compa e he whole indus y ega dless o i s indi idual pa s. The analysis o he companies includes he pe iod om 2009 o 2016. Rega ding he analyzed economies, se en economies o Cen al and Eas e n Eu ope we e selec ed – he Czech Republic (CZ), Slo akia (SK), Poland (PL), Hunga y (HU), Slo enia (SI), Bulga ia (BG), and Romania (RO). This is an ex ended Viseg ád G oup, which o en includes Aus ia, bu in his indus y, almos all companies ha e no disclosed p o i alues, which is an impo an pa o he calcula ions and o he analysis i sel . Slo enia, Bulga ia, Romania and Aus ia a e e y o en associa ed wi h he V4, as ep esen a i es o hese coun ies a end a ious mee ings o his g oup and coope a e wi h i . Those coun ies we e chosen due o he lack o s udies conside ing hem and he indus y. The aim o he esea ch is o e alua e, based on he Gene alized Me hod o Momen s, he ela ionship be ween he six selec ed ac o s and he indeb edness le el in companies belonging o he ag icul u al, o es y and ishing indus y. The esea ch is p o ided a h ee le els acco ding o he pe iod, in which unding sou ces a e used. The i s le el, he use o o al deb esou ces is, he second le el includes long- e m deb esou ces and he hi d one conside s he use o sho - e m deb esou ces. Wi h ega d o he o mula ed aim and li e a u e o e iew, wo esea ch ques ions a e o mula ed: 1. A e he e di e ences in impac o e di e en ma u i ies o use o he unding sou ces used? 2. Does he p ice o inancial ex e nal sou ces a ec he use o hem? EM_3_2021.indd 61 8.9.2021 9:57:48 62 2021, XXIV, 3 Business Adminis a ion and Managemen Tab. 1 shows he assumed links based on a li e a u e o e iew. To assume he impac o he in e es a e on he indeb edness le el, coun ies we e di ided acco ding o he deg ee o economic de elopmen in o de eloped and de eloping economies as s a ed in he li e a u e o e iew. The di ision is based on he di ision by he IMF – Wo ld Economic Ou look Oc obe 2020. 2.1 Va iables In he empi ical pa , h ee models o h ee o ms o indeb edness a e c ea ed wi hin he panel eg ession, and hus indeb edness ac s as an endogenous a iable. The a iable also akes h ee o ms – he a io o o al liabili ies o equi y (DER), he a io o long- e m liabili ies o equi y (DER_L) and he a io o sho - e m liabili ies o equi y (DER_S). The ollowing dis ibu ion o he endogenous a iable can be ound, o example, in Pinko á (2012), Mokho a and Zinecke (2013, 2014), Sik eland and Zhang (2020). Fu he mo e, he e a e six exogenous a iables in each model ep esen ing selec ed de e minan s o he inancial s uc u e. O cou se, he ac o s ha a ec he capi al s uc u e a e innume able. Fac o s ha a e clea ly ela ed o deb sou ces ob aining we e selec ed o his esea ch. Companies ha e o each a ce ain le el o p o i abili y in o de o someone o lend hem. A he same ime, i is usually equi ed o ha e a ce ain amoun o highly liquid asse s in he e en o immedia e epaymen o liabili ies, and companies should also ha e a ce ain amoun o angible asse s ha can be used as colla e al o aise ex e nal esou ces. The de elopmen o he economy is ela ed o he willingness o po en ial c edi o s. The in e es a e and he in la ion a e a e linked o he cos o deb inancing. Howe e , ac o s we e also selec ed on he basis o equency in p e ious s udies, as some ac o s a e abundan , bu o some o hem, he e is no la ge numbe o s udies wi h mainly s a is ically signi ican esul s. Speci ic ac o s include he sha e o EBIT and o al asse s (ROA). This de e minan is p esen in almos e e y s udy dealing wi h his issue, e.g., P ášilo á (2012), Aulo á and Hla sa (2013), Hang e al. (2018), Yildi im e al. (2018), Bilgin (2019), Mo adi and Paule (2019), O lo a e al. (2020), Touil and Mamoghli (2020), Sik eland and Zhang (2020), Jin (2021). Liquidi y, in ou case quick a io (L2), can be ound, o example, in he s udies o Ma ee e al. (2012), Pinko á (2012), Aulo á and Hla sa (2013), Růčko á (2015b), Bilgin (2019), Ramli e al. (2019). The asse s uc u e as he sha e o angible asse s and o al asse s (SA) is also a e y nume ous ac o . I can be ound, o example, in P ášilo á (2012), Aulo á and Hla sa (2013), Mokho a and Zinecke (2013), Daskalakis e al. (2017), Hang e al. (2018), Lamb inoudakis e al. (2019), Sik eland and Zhang (2020), Jin (2021). The las h ee de e minan s ep esen he ex e nal en i onmen o he company. Al hough hese ac o s a e p esen in p e ious s udies, he e is no a la ge numbe o s udies wi h s a is ically signi ican esul s. The GDP g ow h a e can be ound in he s udies o Hanousek and Shamshu (2011), Jõe ee (2013), Yinusa e al. (2017), Yildi im e al. (2018), Ramli e al. (2019). The in la ion a e (INF) was examined, o example, by Öz ekin (2015), Yinusa e al. To al deb Long- e m deb Sho - e m deb P o i abili y/liquidi y − − − Liquidi y − − − Asse s uc u e − + − In la ion − − + GDP g ow h a e + + − In e es a e – CZ, SK, SI + + + In e es a e – PL, HU, RO, BG − − − Sou ce: own Tab. 1: Expec ed ela ionships be ween selec ed ac o s and indeb edness le el EM_3_2021.indd 62 8.9.2021 9:57:48 63 3, XXIV, 2021 Business Adminis a ion and Managemen (2017), Huong (2018), Daskalakis e al. (2017), Bilgin (2019), Ramli e al. (2019). Dependency be ween le e age and he basic in e es a e o he economy (IR) we can ind in he s udies o Bokpin (2009), Yinusa e al. (2017), Daskalakis e al. (2017), Ramli e al. (2019). 2.2 Me hodology Reg ession analysis was chosen o de e mine he ela ionship be ween endogenous and exogenous a iables. Mo e speci ically, panel eg ession, he use o which is app op ia e wi h espec o a la ge sample o companies and de e minan s ha a e he subjec o his esea ch. The use o panel eg ession and panels allows c ea ing mo e dynamic model while moni o ing company he e ogenei y. Howe e , a simple panel eg ession – he leas squa es me hod is insu icien o his esea ch as he s udy pe iod is ela i ely sho and also equi es s a iona y da a, which would elimina e a numbe o inancial se ies and he esul ing models would no ha e o con ain all he a iables (usually de e minan s o ex e nal en i onmen ) (P ůcha, 2014). As epo ed by Jaganna han e al. (2002), he wo-s age Gene alized Me hod o Momen s (GMM) elimina es sho comings o o he me hods which can be used o business da a analysis. A he same ime, o e all, his me hod was de eloped p ima ily o inancial esea ch. This me hod was i s explained and gi en some ounda ion in a s udy by A ellano and Bond (1991). Subsequen ly, he model was de eloped and shaped in o he s udies. The gene al a ibu es o his me hod a e desc ibed in s udy o Roodman (2009): sui able o a la ge se o da a, which, a he same ime, may no include a long pe iod o ime; exis ence o a linea unc ional ela ionship; p esence o a ixed indi idual e ec s; on he le side o equa ion, he e is only one dependen a iable depending, among o he hings, on i s own lagged alue; o a change, an independen a iable does no ha e o be gi en exac ly (which means ha he e may be a co ela ion be ween pas and p esen e o s); and inally au oco ela ion and he e oskedas ici y, which a e no es ed in any way wi hin his me hod ( o example unlike he leas squa es me hod), should no be ac oss indi idual obse a ions, bu may be wi hin hem. A signi ican posi i e e ec o his me hod acco ding o Ullah e al. (2018), he solu ion o he p oblem o endogenei y = co ela ion be ween he independen a iable and he e o e m is. This me hod conceals ce ain elemen s egula ing he sou ces o endogenei y, which a e conside ed unobse ed he e ogenei y, simul anei y and dynamic endogenei y. These elemen s include, o example, he al eady men ioned lagged alue o he dependen a iable, which o ms one o he independen a iables on he igh side o he equa ion. Fu he mo e, his au ho s a es ha i is necessa y o es he accu acy o he model wi h espec o he possible occu ence o au oco ela ion and he e oskedas ici y. The e a e a numbe o es s. This esea ch uses he Sa gan es . The esul s o his es speci ically show he ex en o which he model is able o p o ide almos he same esul s e en i we sligh ly change i s pa ame e s. The model is buil co ec ly i i s inal alues a e highe han 0.05. The ollowing equa ions cap u e he analyzed ela ionships be ween a iables: Yi = α0 + β1 * Yi –1 + β2 * ROAi + + β3 * L2i + β4 * SAi + β5 * GDPi + + β6 * INFi + β6 * IRi + εi ; (1) whe e Yi ep esen s he endogenous a iable DER/DER_L/DER_S, i.e., some o m o indeb edness o he i- h numbe o companies in he gi en economy in he selec ed indus y o he pe iod 2009–2016. Exogenous a iables deno ing indi idual de e minan s a e in he coe icien s β1 – β 6. Among he exogenous a iables is also Yi -1, which is gene a ed au oma ically by he model and allows modeling he mechanism o pa ial adap a ion in a dynamic model. This a iable indica es he lagged alue o he endogenous a iable wi h one-yea lag speci ically as all da a ep esen an annual equency. The las a iables a e he symbols α and ε, which a e also an au oma ic pa o he model and ep esen he cons an and he andom componen o he model. The andom componen con ains all o he de e minan s o he inancial s uc u e, which he esea ch does no deal wi h and canno be neglec ed. 2.3 Cha ac e iza ion o Indus y As o he indus y, ag icul u e, o es y and ishe y can be conside ed he neu al indus y, in which companies p oduce i al p oduc s hus hei de elopmen is no en i ely linked o he de elopmen o he whole economy. Howe e , EM_3_2021.indd 63 8.9.2021 9:57:48 64 2021, XXIV, 3 Business Adminis a ion and Managemen his indus y is a ec ed by na u al condi ions – especially clima ic condi ions. The de elopmen o hese condi ions a ec s his indus y di ec ly and indi ec ly. Fo example, ag icul u e, o es y and logging a e di ec ly a ec ed by wea he changes and, in ecen yea s, by i s a ypical whims, which ha e a a he nega i e e ec on ag icul u al p oduc ion. Fo ins ance, in 2012, Eu ope was plagued by ex eme os s o in 2015, he e was se e e d ough and hea . F om he s uc u e o he e i o y om he CIA da abase, i was ound ha Romania and Hunga y ha e he la ges amoun o ag icul u al land (60.7% and 58.9% o e i o y). By con as , Slo enia has he leas amoun o ag icul u al land (22.8% o e i o y). In all coun ies excep Slo enia, a able land domina es, bu in Slo enia i is pe manen pas u e. I is well known in Eu opean coun ies ha ag icul u e, o es y and ishe y do no con ibu e signi ican ly o GDP – in a e age 3.6%. A he same ime, he main p oduc s o his indus y a e e y simila in selec ed economies: po a oes, whea , ege ables, suga bee , co n, ui s, hops, sun lowe seeds, eggs, pigs, sheep, ca le, and poul y. The s uc u e o he e i o y om he CIA da abase also shows wha pe cen age o he e i o y is occupied by o es s. The la ges a ea (62.3%) can be ound in Slo enia. As i comes o he composi ion o o es s – coni e ous o es s p edomina e in Poland and he Czech Republic; b oadlea o es s p edomina e in Romania, Bulga ia, Hunga y and Slo akia. In he a o emen ioned Slo enia, i is i y- i y. The las pa o he indus y is ishe y. Las bu no leas , he s uc u e o he e i o y om he CIA da abase con ains he pe cen age o he e i o y occupied by wa e a eas – on a e age i is a ound 2.4%. O cou se, he e a e esh bodies o wa e in all coun ies, bu sal y ones a e no a ma e o cou se. The Czech Republic, Slo akia and Hunga y a e landlocked coun ies wi hou access o any sea o ocean. Poland has access o he Bal ic Sea, Romania and Bulga ia o he Black Sea and Slo enia o he Ad ia ic Sea. To compile in o ma ion on he sub-indus y, he Wo ld Bank da abase ( ishing p oduc ion s a is ics) was used, which con ains he olume o aqua ic species caugh by a coun y o all comme cial, indus ial, ec ea ional and subsis ence pu poses in ones. To b ing an idea, how much he esea ched economies p oduce, he numbe s o p oduc ion olume we e con e ed o pe cen age o show by how many pe cen hose coun ies con ibu e o he Eu opean Union ishe ies p oduc ion. The Polish economy shows he la ges sha e – 3.9%. The emaining economies ange om 0.03 o 0.4%, which means ha ishe y is no a signi ican economic ac i i y o gi en economies. 2.4 Cha ac e iza ion o Economic De elopmen in Selec ed Economies Following he cha ac e is ics o he indus y, i is also app op ia e o cha ac e ize he economic de elopmen in selec ed coun ies. Each o he economies has had i s own speci ic de elopmen , bu he wo ld and Eu ope ha e been a ec ed by se e al e en s. A he beginning o he pe iod unde e iew, he global inancial c isis subsided, which u ned in o a global economic c isis. In Eu ope, his c isis was ollowed by a deb c isis associa ed mainly wi h he coun ies o sou he n Eu ope and I eland. The la es e en , he global slowdown in economic g ow h in 2013 was. Se en selec ed economies eac ed di e en ly o hose e en s. The Polish economy is he only economy ha ing no been hi ha d by any o hese e en s, and has e en g own in GDP h oughou . Al hough i is ue ha in 2012 and 2013, he g ow h was lowe (1.61 and 1.39%) compa ed o he a e age g ow h be o e and a e hese yea s, which was o e 3%. Poland is also he only coun y in he Eu opean Union ha did no unde go he ecession du ing he c isis pe iod 2009–2013 and i s GDP g ew by 2.9% yea on yea on a e age. The eason o his g ea de elopmen , he s imulus package a e joining he Eu opean Union is, Eu opean subsidies, co-o ganiza ion o he Eu opean Foo ball Championship in 2012 (high public in es men ), he size and ela i e sepa a eness o he economy. In imes o c isis, he economy was suppo ed by s ong domes ic demand. Bulga ia is ano he economy ha did no ha e majo p oblems in c ises. In 2009, GDP ell, unemploymen and he go e nmen de ici inc eased. In 2012 and 2013, GDP g ew, bu a a e y slow pace. Howe e , despi e hese luc ua ions, he economy unc ioned wi hou majo p oblems. The Czech Republic eme ged ela i ely well om he inancial c isis, al hough GDP ell sha ply in 2009, bu he economy did no EM_3_2021.indd 64 8.9.2021 9:57:49 65 3, XXIV, 2021 Business Adminis a ion and Managemen ha e majo p oblems. The p oblems came only wi h he onse o he global slowdown, when GDP ell in 2012 and 2013 due o a decline in domes ic demand and in es men as well as o eign demand. Consume s’ demand declined as household disposable income declined. Companies educed in es men s wi h ega d o iscal es ic ions in 2012 and he upda e o ax legisla ion in 2013. In he same pe iod, exchange a e in e en ions we e in oduced by he Czech Na ional Bank; hese in e en ions emained ongoing om 2013 o 2017. A ailu e o mee he in la ion a ge and de la ion dange was he eason o doing so. Slo akia was no signi ican ly a ec ed by he inancial c isis ei he ; howe e , in 2009, GDP ell by almos 6%. The decline in o eign demand and in p oduc ion was he eason o i , especially in he p o-expo indus ies (mainly he au omo i e indus y, which in his pe iod accoun ed o one qua e o he Slo ak GDP). In he ollowing yea s, GDP g ew, e en in 2012/2013 al hough in hese yea s, he inc ease was lowe . The eason why Slo akia was no hi ha d by he c isis can be ound in bo h he long- e m illiquid s ock exchange and, abo e all, in he ixa ion o he Slo ak ko una o he Eu o as Slo akia en e ed he Eu o a ea a he beginning o 2009. The nex h ee economies we e no so lucky and, un o una ely, he inancial c isis hi hem ha d. Slo enia wen h ough he same de elopmen s in he eal es a e and mo gage ma ke s as he Uni ed S a es did, which igge ed he c isis. Un o una ely, he e was also a eal es a e bubble, which was associa ed wi h mo gage inancing. F om 2008 o 2014, he en i e eal es a e ma ke and p ices ell. Following his c isis, Slo enia wen s aigh o he banking c isis in 2013. This c isis had i s o igins in excessi e isk- aking, poo managemen o s a e-owned banks and insu icien supe ision. Un o una ely, mos banks we e s a e-owned. Despi e hese signi ican p oblems, Slo enia did no eques in e na ional assis ance and he economy s abilized in 2015 hanks o local go e nmen e o ms. Hunga y was signi ican ly in luenced by he c isis due o poo go e nmen pe o mance, high indeb edness and an expo -o ien ed economy. Abo e ha , he c isis had ano he impac he e in ol ing exchange a es and cu encies; companies and o dina y ci izens o en we e bu dened by loans and mo gages in Eu os o , mo e o en, in Swiss ancs. The c isis was also accompanied by a o in weakening, which signi ican ly inc eased he indeb edness le el o hese en i ies. In 2008, in o de o s abilize he economy, he go e nmen was o ced o apply o an in e na ional loan, which i ecei ed in amoun o almos 6.5 billion om he IMF, WB and he EU. Un o una ely, he subsequen g ow h did no las long as he Hunga ian economy was also hi by a slowdown in 2012 and 2013. The las economy conside ed, Romania is, which also had o apply o an in e na ional loan in 2009, which i ecei ed in he amoun o 20 billion. This loan s eng hened o eign exchange ese es and e i alized he c edi ma ke . The economy eco e ed and e en g ew as one o he ew du ing 2012/13. 2.5 The Amoun and Composi ion o Liabili ies and Capi al S uc u e in Indi idual Economies Be o e analyzing he esul s o he eg ession analysis, i is impo an o analyze he dependen a iable, i.e., indeb edness. In Tab. 2, we can see he a e age alues o medium and la ge companies in e ms o non-cu en liabili ies (NCL), cu en liabili ies (CL), deb , equi y and deb -equi y a io. Non-cu en liabili ies include long e m liabili ies o he company, which consis o long- e m inancial deb s (e.g., loans, c edi s, bonds), o he long- e m liabili ies ( ade deb s, g oup companies, pension loans, e c), p o isions (social secu i y, axes, e c) and de e ed axes. Cu en liabili ies consis o loans (e.g., o c edi ins i u ions, pa o long- e m inancial deb s payable wi hin he yea , bonds, e c), deb s o supplie s and con ac o s ( ade c edi o s), and o he cu en liabili ies (pension, pe sonnel cos s, axes, in ag oup deb s, accoun s ecei ed in ad ance, e c). Deb is hen he sum o he non-cu en and cu en liabili ies. Equi y includes capi al and o he sha eholde s unds. We can see ha he deb is no excessi ely high; he highes alues (2.1) o he deb -equi y a io a e eached by Romanian medium-sized companies. I is ob ious ha deb s exceed equi y wice. This may be caused by he ac ha Romanian ag icul u e was s ill no as e icien as i was du ing he pe iod unde e iew. This indus y was poo ly echnically equipped, unp oduc i e and lacked inances. Liabili ies’ inc ease could be caused by e.g. subsidies o EM_3_2021.indd 65 8.9.2021 9:57:49 66 2021, XXIV, 3 Business Adminis a ion and Managemen Eu opean unds o o he in es men incen i es ha he indus y in Romania despe a ely needed. Slo ak medium-sized companies, Slo enian companies and Bulga ian la ge companies a e o he ones, in which he deb - equi y a io exceeded 1. Howe e , he alues a e no signi ican ly high. A e iew o he li e a u e indica ed wha he s uc u e o asse s in ag icul u e should p obably look like, om which he s uc u e o liabili ies de i es. We see ha only in he case o medium- sized Czech and Polish companies’, long- e m liabili ies p e ail and, in all cases, no signi ican ly. The p edominance o sho - e m liabili ies in Czech ag icul u al companies was also e ealed, o example, by S ehel e al. (2019). Liabili ies a ising om business ela ionships wi h supplie s a e he main componen in hese sho - e m liabili ies, on a e age. 3. Resea ch Resul s and Discussion Tab. 3 shows he esul ing panel eg ession coe icien s o medium-sized ag icul u al companies o he h ee o ms o deb . I is clea ha comple e esul s o all economies and de e minan s a e no a ailable o any o m o deb . Some economies we e excluded due o non-compliance wi h he Sa gan es . I s esul s a e p esen ed in he las column. The missing economies did no exceed alue o 0.05, so he models we e no obus and had no signi icance. The emaining economies passed his es and in he las column, we see ha he alues exceed he gi en alue. As men ioned in he Me hodology sec ion, he GMM model con ains an au oma ic a iable – he lagged alue o he dependen a iable, he coe icien s o which a e cap u ed in he i s column. We see ha mos o hese coe icien s a e s a is ically signi ican . The posi i e impac p e ails, which means ha i companies used deb inancing in he p e ious pe iod, hey would likely use i in he ollowing pe iod hus hey would inc ease he deb . On he o he hand, he coe icien s a e so low ha we canno p ac ically alk abou any impac . Fo p o i abili y, all o ms o indeb edness we e expec ed o ha e a nega i e impac on he deb le el. Such impac was me by Czech, Polish, Bulga ian and Romanian companies. These esul s we e also con i med in s udies in ol ing hese economies by he ollowing au ho s – Weill (2004), Ni o ozhkin (2005), P ášilo á (2012) also o ag icul u e, Mokho a and Zinecke (2013), P ędkiewicz and P ędkiewicz (2015), Růčko á (2015b) o Polish companies. On he o he hand, Růčko á (2015a, 2015b) e ealed a posi i e impac o p o i abili y on he indeb edness le el in Czech companies, bu hey we e companies o he cons uc ion, manu ac u ing and ene gy indus ies. This was expec ed in Poland and Bulga ia because hese economies p ospe ed du ing he pe iod unde e iew and did no ha e majo economic p oblems. The nega i e impac o p o i abili y e en ma ched he GDP g ow h a es in hese coun ies being also nega i e indica ing ha companies p e e ed o CZ SK PL HU SI BG RO NCL_medium 56% 27% 53% 35% 40% 39% 46% NCL_la ge 42% 38% 35% 31% 39% 30% 36% CL_medium 44% 73% 47% 65% 60% 61% 54% CL_la ge 58% 62% 65% 69% 61% 70% 64% Deb _medium 41% 53% 43% 36% 57% 45% 68% Deb _la ge 16% 28% 34% 44% 51% 49% 60% Equi y_medium 59% 47% 57% 64% 43% 55% 32% Equi y_la ge 84% 72% 66% 56% 49% 51% 40% Deb -equi y a io_medium 0.70 1.10 0.76 0.59 1.31 0.82 2.10 Deb -equi y a io_la ge 0.20 0.39 0.53 0.77 1.07 1.10 1.49 Sou ce: own based on he da a om O bis da abase Tab. 2: The amoun and composi ion o liabili ies and capi al s uc u e EM_3_2021.indd 66 8.9.2021 9:57:49 73 3, XXIV, 2021 Business Adminis a ion and Managemen in e es a e inc eases/dec eases ha ha e had a signi ican impac on he choice o unding sou ces. The Slo ak and Czech economies we e among he coun ies wi h e y low in e es a es, which was ob iously used by ag icul u al companies, so in e es a e announcemen s should be ocused on. In Hunga y, ag icul u e is one o he mos impo an pa s o he na ional economy. The economy has p ospe ed since he middle o he pe iod unde e iew con inuing in he ollowing yea s. As a esul , Hunga ian companies we e able o use mo e deb inancing, which e lec ed he p o i abili y. Highe a e age in la ion a e educed he alue o cu en deb , which implies ecommenda ions ega ding in la ion expec a ions. As i comes o Slo enian companies, hey we e e y a ec ed by he in la ion a e. A e age in la ion a e was a ound 1%, bu e en ha was enough o educe he eal in e es a e, which, gi en he le el o a e (which was a ound ze o), mean e y cheap deb inancing wi h e y good impac on p o i abili y. Conclusions This esea ch ocused on he inancial s uc u e and selec ed de e minan s ha could a ec i . The ag icul u e, o es y and ishing indus y in se en selec ed economies o Cen al and Eas e n Eu ope we e he subjec o he esea ch, namely V4, Romania, Bulga ia and Slo enia. The inancial s uc u e was ep esen ed by he o al, long- e m and sho - e m indeb edness o he companies. As he speci ic de e minan s, p o i abili y, liquidi y, asse s uc u e, GDP g ow h a e, in la ion a e and he basic in e es a e o he economy we e used. A o al o wo esea ch ques ions we e es ed on 10,664 companies, o which 9,771 we e medium-sized and 873 la ge companies. The companies we e analyzed o he pe iod 2009 o 2016 using he Gene alized Me hod o Momen s. The aim o he esea ch was o analyze he impac o selec ed de e minan s on he inancial s uc u e o se en selec ed economies belonging o he indus y o ag icul u e, o es y and ishing. Wi h ega d o he o mula ed aim and li e a u e o e iew, wo To al deb DER(−1) ROA L2 SA GDP INF IR SK −0.315a25.927a−557.025b125.592c PL 2.046b−30.784a−81.911b325.220a HU −0.370a2.898a 331.008a −176.022a SI −3.380b0.672a Long- e m deb CZ −0.082a 1.782b0.578c5.362b SK −10.254b0.014a −347.718a 4.864a HU −0.406a −7.710a−415.431a BG −0.317b−0.432a −82.639a RO 0.002a−53.024a −44.720a Sho - e m deb CZ −1.368b 1.671c−2.676a−6.022a PL 2.329c −0.107a −396.134a −476.050c SI 0.481a9.948a−0.090a 15.104b BG −0.504a −0.228a 59.289a−167.214a Sou ce: own based on da a om O bis da abases No e: Symbols a, b, o c indica e signi icance a 1%, 5%, o 10%. Tab. 4: GMM o la ge and e y la ge companies EM_3_2021.indd 73 8.9.2021 9:57:50 74 2021, XXIV, 3 Business Adminis a ion and Managemen esea ch ques ions we e o mula ed, answe s o which we e o be ound wi hin he esea ch: 1. A e he e di e ences in impac o e di e en ma u i ies o use o he unding sou ces used? 2. Does he p ice o inancial ex e nal sou ces a ec he use o hem? Wi hin he esea ch, pa ial aims we e se – o ind di e ences be ween he impac o de e minan s on he inancial s uc u e o medium companies and la ge companies. An analysis o he inancial s uc u e was also linked o his pa ial aim. This analysis showed ha sho - e m liabili ies p edomina e in he capi al s uc u e ega dless o he company size. Fo la ge companies, he p edominance o sho - e m liabili ies was highe han o medium-sized companies. A he same ime, la ge companies we e, on a e age, less indeb ed han medium- sized companies. Rega ding he asse s uc u e, depending on he indus y, in en o ies should be mo e ep esen ed, as ag icul u ally o ien ed companies, which a e cha ac e ized by a la ge amoun o in en o ies, clea ly domina e in almos all coun ies. In en o ies o medium- sized companies accoun ed o on a e age 17% o o al asse s, o la ge companies his a io was lowe , only 12%. As o he impac o indi idual de e minan s, bo h in e nal and non-co po a e ac o s had an impac on he deb le el. Howe e , he ac o s o he ex e nal en i onmen – economic de elopmen , he in la ion a e and he basic in e es a e had a s onge impac . A o al o se en ac o s we e examined, he esul s o which a e p esen ed below. The i s a iable, he annual lagged alue o he deb i sel was. Rega dless o company size, he impac was e y small, excep o la ge Polish companies, whe e his impac was al eady in single digi s o posi i e alue. The posi i e impac o hese companies means ha i hey used deb inancing in he p e ious pe iod, hey would use i in he ollowing pe iod, which would inc ease he deb e en mo e. In a mo e de ailed analysis o he indeb edness o Polish la ge companies, his was indeed he case o almos he en i e pe iod unde e iew. F om 2009 o 2015, deb inc eased om PLN 3.8 billion o PLN 9.1 billion. In 2016, deb dec eased o he alue o PLN 8.2 billion. Due o he posi i e coe icien , i could be expec ed ha deb would g ow in he coming yea s, bu gi en he cu en pandemic, i is no possible o plan he u u e de elopmen using p e ious da a and impac s. The emaining impac s we e e y low, howe e , o medium-sized companies, an indica ion o a posi i e impac p e ailed, while o la ge companies, an indica ion o a nega i e impac p e ailed. As o he impac o p o i abili y, he e was posi i e and nega i e impac seen on bo h ypes o companies; o bo h ypes o companies, he nega i e impac s sligh ly ou weigh he posi i e ones. The posi i e impac means ha i companies’ p o i s g ew, hey a oided he isk o bank up cy and we e a ac i e o c edi o s. A he same ime, lende s would o e hem mo e deb inancing op ions han usual. On he con a y, he nega i e impac means ha in imes o g owing p o i s, companies p e e ed o use hese esou ces o inance hei business ac i i ies. Simul aneously, he impac o p o i abili y in speci ic coun ies was o en associa ed wi h he impac o de elopmen in GDP g ow h. Ve y o en hese e ec s a e he same. When compa ing coun ies ega dless o companies’ size, we can say ha he nega i e impac was seen mos o en in he Czech Republic, Poland, Bulga ia and Slo akia. These economies de eloped wi hou majo economic di icul ies du ing he pe iod unde e iew hus g owing p o i s in a pe iod o economic peace and p ospe i y led companies o use own sou ces o inancing no o be o e bu dened in imes o wo se economic condi ion. In he u u e, i can be expec ed ha i he e is a ela ionship be ween p o i abili y and economic de elopmen , he p o i abili y coe icien s a e likely o ha e he same sign as he economic de elopmen coe icien s. Gi en ha he indus y should be neu al, he e will p obably be no highe luc ua ions in p o i abili y due o he pandemic. Rega dless o he company size, he impac o liquidi y was a he nega i e and, a he same ime, e y low hus we canno alk abou any in luence a all. Ra he , his indica es he di ec ion, in which deb would be a ec ed i liquidi y had a mo e signi ican impac . A nega i e indica ion means ha he mo e liquid asse s a company has, he mo e i s deb would dec ease, as high liquidi y can lead o insu icien in es men ac i i ies and he e o e, no deb inancing would be needed. The amoun o angible asse s had a p edominan ly nega i e impac on deb le el. Fo medium-sized companies, his impac was EM_3_2021.indd 74 8.9.2021 9:57:50 75 3, XXIV, 2021 Business Adminis a ion and Managemen sligh ly mo e p onounced. A a he posi i e in luence was usually expec ed. Howe e , gi en ha he sample examined was domina ed by ag icul u al companies, a nega i e in luence could also be expec ed wi h ega d o he possible la ge amoun o s ocks. The nega i e impac o his a iable on he indeb edness le el means ha he mo e angible asse s companies ha e ha can be used as colla e al, he mo e indeb edness would dec ease as hese asse s canno be used o hedge sho - e m liabili ies, o which hese companies ha e many. Medium- sized companies had on a e age 58% o liabili ies in he o m o sho - e m liabili ies and la ge companies e en 64%. O cou se, ce ain asse s could also be used o secu e sho - e m loans, bu , e.g., in en o ies o semi- inished p oduc s in a selec ed indus y a e pe ishable ela i ely quickly and do no ha e a du abili y o e en a ew mon hs. The ag icul u al, o es y and ishing indus y can heo e ically be conside ed neu al, as his indus y p oduce i al p oduc s and hei de elopmen is hus no en i ely ela ed o he de elopmen o he whole economy, bu a he o he clima ic condi ions ha signi ican ly a ec he indus y. Un o una ely, he esul s o he panel eg ession do no comple ely co espond o his s a emen , because in e ms o he s eng h o he impac , he de e minan s o he ex e nal en i onmen ha e a mo e signi ican impac on he indeb edness le el han he in e nal one. The de elopmen o he GDP g ow h a e had a a he nega i e impac , and his impac was mo e p onounced o la ge companies. This means ha companies e.g. use hei inancing sou ces mo e in he pe iod o economic g ow h, which is ob ious, as hei p o i s usually g ow du ing such a pe iod and om he poin o iew o capi al s uc u e, i would be app op ia e o educe deb , which could bu den companies in imes o c isis. Mos o he examined economies did no unde go majo luc ua ions du ing he gi en pe iod, and despi e occasionally signi ican p oblems, a leas hal o he examined pe iod, he economies we e s abilized. Wi h ega d o economic de elopmen , he nega i e impac has i s jus i ica ion, as he e is a link o he al eady men ioned impac o p o i abili y. The nega i e impac o GDP is o en associa ed wi h he nega i e impac o p o i abili y, which is closely ela ed as co po a e p o i s usually g ow in imes o economic boom. Companies (which a e no p epa ing e y expensi e in es men s, o which hey would p obably ha e o use a deb inancing) should hink abou he u u e de elopmen o he economy, which always slows down a e some ime and e en, o example, all in o ecession. Gi en his, i would be app op ia e o educe deb in he case o inc easing p o i abili y; o he wise, i could e en jeopa dize he exis ence o socie y a e he c isis. Al hough he esul s show ha companies educed hei indeb edness du ing he pe iod unde e iew, he opposi e is ue. In he yea - on-yea analysis o o al indeb edness, he indeb edness o Czech, Polish, Bulga ian and Romanian companies, ega dless o hei size, inc eased du ing he pe iod unde e iew and some imes qui e signi ican ly. The indeb edness o Hunga ian companies also inc eased, howe e , he coe icien s o his economy was posi i e and an inc ease was expec ed. The only esul ha me he expec a ions o a decline in deb can be seen in Slo ak medium- sized companies, whe e deb ell on a e age. Conside ing he impac o he in la ion a e, he posi i e impac on deb le els domina es o medium-sized companies (excluding Romanian companies), while o la ge companies, he impac s we e hal and hal . Di e en impac s could be seen in Czech, Slo ak and Hunga ian companies, which was in e es ing conside ing ha hey a e he same economies, jus he companies we e di ided by he size. In he case o Polish, Slo enian and Bulga ian companies, a posi i e impac is obse ed o bo h ypes o companies. Mos economies, wi h he excep ion o Romania and Hunga y, had e y low in la ion a es, and some imes e en economies ell in o de la ion. The posi i e impac is e y in e es ing. The de elopmen o he in la ion a e las ed o se e al consecu i e yea s and lende s we e able o lend mo e unds, bu hey s ill could no be su e ha he in la ion a e would no jump by a ew pe cen age poin s o e a pe iod o ime o unp edic able easons. The impac o in e es a es was mo e o less ul illed acco ding o he dis ibu ion o economic de elopmen . The esul s a e basically in line wi h he de elopmen o in e es a es. In Poland, Hunga y and Romania, a es we e qui e high (a ound 4% on a e age, wi h peaks e en a ound 8%), and i was in hese coun ies, ega dless o companies’ size, ha he in e es a e had a nega i e impac on deb le els. The impac was expec ed EM_3_2021.indd 75 8.9.2021 9:57:50 76 2021, XXIV, 3 Business Adminis a ion and Managemen as a highe in e es a e means highe deb acquisi ion cos s. Con e sely, in he emaining economies, in e es a es had a posi i e impac on deb le els. In hese economies, in e es a es we e e y low, some imes ze o, which is a ac i e in e ms o he deb cos . The only excep ions, Bulga ian la ge companies a e, in which a nega i e impac is seen. The di ec ion o he impac was e y unexpec ed, as Bulga ia was one o he economies wi h he lowes in e es a es du ing he pe iod unde e iew – on a e age 0.13% and a maximum 0.55%. Howe e , in e es a es in all economies ell sha ply du ing he pe iod unde e iew, some imes o ze o. The e o e, i his end would con inue, we can expec an inc ease in deb in all economies, including Romania, Poland and Hunga y, gi en his a iable. Acknowledgmen s: This a icle was suppo ed by SGS/16/2020 “In luence o selec ed in e nal and mac oeconomic de e minan s on inancial s uc u e o companies in selec ed coun ies o Cen al and Eas e n Eu ope.” Re e ences Acedo-Ramí ez, M. A., & Ruiz-Cabes e, F. J. (2014). De e minan s o Capi al S uc u e: Uni ed Kingdom Ve sus Con inen al Eu opean Coun ies. Jou nal o In e na ional Financial Managemen & Accoun ing, 25(3), 237–270. h ps://doi.o g/10.1111/ji m.12020 A ellano, M., & Bond, S. (1991). 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