Analysis of Factors Influencing Financial Leverage In Lithuanian Listed Companies

Abstract

The goal of the paper is to identify factors influencing financial leverage in Lithuanian listed companies. The factors influencing financial leverage have been analyzed in theoretical and empirical literature although the authors haven’t found this type of research done in Lithuania. The authors analyze the theories explaining financial leverage and factors influencing financial leverage. Survey data include 2008-2012 year financial statements of 30 firms listed on the NASDAQ OMX Vilnius stock exchange. The methods used in this paper include econometric and regression analysis. The research allowed the confirmation of financial constraints (specif-ically, working capital) and a firm's industry as factors influencing financial leverage. Financial constraints impel companies to have higher financial leverage, and firms in the same industry are predisposed to change their financial leverage accordingly.