Investigating the capital structure og Greek firms: some preliminary evidence

Abstract

In this paper we investigate the capital structure of the Greek firms listed in the Athens Stock Exchange. We analyze the current capital structure of the firms and we tackle two important issues: the target capital structure that the firms follow and the notion of debt capacity. The results are based on the answers of the firms in a questionnaire. The current capital structure is further analyzed using data from the Athens Stock Exchange database. Our results show that Greek firms avoid using long-term debt, thus their capital structure consists mainly of equity. This finding is also verified by the fact that firms set target capital structures that also consist of very little long-term debt capital. There is evidence that firms in general prefer short-term debt to long-term. As far as debt capacity is concerned, firms generally consider their debt capacity when they decide about the financing procedure of their long-term investment plans and most of them measure it either every three months or twice per year.