FACTORS DETERMINING THE CORPORATE CAPITAL STRUCTURE IN THE CZECH REPUBLIC FROM THE PERSPECTIVE OF BUSINESS ENTITIES

The specific corporate capital structure is fundamentally a complex process dependent on a large variety of determinants; and the chosen financial strategy therefore depends on the particular decisions of individual firms. The aim of this contribution is to capture the most important determinants of the corporate capital structure from the perspective of entrepreneurs on the basis of an empirical inquiry. Although the number of respondents was limited, inquiry results still can be considered as relevant to formulate conclusions for small and medium-sized enterprises operating in the manufacturing and processing sectors with the legal form of the limited liability company. To identify the most important factors affecting corporate decisions concerning the sources of financing, the statistical methods and procedures were used for the research evaluation. With the help of factor analysis, the three key external factors, brought in by the entrepreneurs, were derived: the economic and political development of the country, the market environment of the country, and the levels of tax and interest rates. The effect of internal factors determining the corporate capital structure was perceived by respondents as more important. The inquiry revealed that the most important internal factors were supposed to be: the corporate philosophy, the cost of the capital, and the financial health and indebtedness of a business. The answer to the essential question of this article, whether the final capital structure of a company is the result of its own decision-making, or rather a result of various external factors, thus tends rather to the predominance of the internal factors.