The impact of the board of directors’ characteristics on the capital structure in the context of Finnish and Swedish firms
Barb-Dudan, Teodora (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-202404247594
https://urn.fi/URN:NBN:fi:amk-202404247594
Tiivistelmä
One of the primary duties of the board of directors is to enhance the firm’s financial performance in order to meet stakeholder’s expectations. Optimal capital structure decisions made by the board of directors have represented a major competitive advantage for firms, crucial to succeed in today’s dynamic business environment.
The study’s goal was to discover whether board of directors’ characteristics have an impact on the firm’s capital structure in the Finnish and Swedish context. The thesis employed a deductive research methodology that was compatible with the quantitative approach of the study. The data of 24 Finnish and 36 Swedish firms was collected from the sample firms’ annual reports, covering a period of nine years, from 2012 to 2020. Descriptive, correlation and regression analysis were implemented by utilizing IBM SPSS software. The chosen methodology allowed the author to address the research questions, test the hypotheses and ensure the validity and reliability of the study.
The findings of the research demonstrated that board of directors’ characteristics had an impact on the firm’s capital structure. The results showed that board size, education level, board gender and board independence had an impact on firms’ capital structures. The board age and multiple directorship attributes did not have an impact on the firm’s total debt. When looking at the long-term debt, board age, multiple directorship and board gender did not have an impact on the long-term debt-to-equity ratio either.
The study’s goal was to discover whether board of directors’ characteristics have an impact on the firm’s capital structure in the Finnish and Swedish context. The thesis employed a deductive research methodology that was compatible with the quantitative approach of the study. The data of 24 Finnish and 36 Swedish firms was collected from the sample firms’ annual reports, covering a period of nine years, from 2012 to 2020. Descriptive, correlation and regression analysis were implemented by utilizing IBM SPSS software. The chosen methodology allowed the author to address the research questions, test the hypotheses and ensure the validity and reliability of the study.
The findings of the research demonstrated that board of directors’ characteristics had an impact on the firm’s capital structure. The results showed that board size, education level, board gender and board independence had an impact on firms’ capital structures. The board age and multiple directorship attributes did not have an impact on the firm’s total debt. When looking at the long-term debt, board age, multiple directorship and board gender did not have an impact on the long-term debt-to-equity ratio either.