Equity ratios of Austrian nonfinancial corporations – evidence from balance sheet data

Christian Beer () and Walter Waschiczek ()
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Christian Beer: Oesterreichische Nationalbank, Economic Analysis Division
Walter Waschiczek: Oesterreichische Nationalbank, Economic Analysis Division

Monetary Policy & the Economy, 2019, issue 19/Q3, 25-41

Abstract: This article analyzes the equity ratios of Austrian nonfinancial corporations using balance sheet data. According to our data, the median equity ratio is about 34%, subject to strong heterogeneity across industries. While companies with a high share of tangible assets tend to have a low equity ratio, we find hardly any link between the share of intangible assets and the equity ratio. Our results suggest that low-tech companies have a lower equity ratio than companies with a higher level of technology intensity. However, high-tech companies do not generally exhibit a higher equity ratio than medium-tech companies. The median equity ratio of start-ups is higher than the overall median equity ratio but lower than the median equity ratio of all high-tech companies. Furthermore, our data suggest that the relationship between firm size and equity ratio is not linear – up to a certain size, the equity ratio decreases with firm size. At least in part, this might be due to the public information available about firms as we find a strong relationship between opaqueness and firm size. Firm age affects the equity ratio only for the first ten years of company life.

Keywords: corporate finance; capital structure; equity ratio (search for similar items in EconPapers)
JEL-codes: E61 G1 G2 G32 (search for similar items in EconPapers)
Date: 2019
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