Capital Structure, Corporate Governance, Equity Ownership and Their Impact on Firms’ Profitability and Effectiveness in the Energy Sector

George Georgakopoulos, Kanellos Toudas, Evangelos I. Poutos, Theodoros Kounadeas and Stefanos Tsavalias
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George Georgakopoulos: Department of Agricultural Economics and Development, Agricultural University of Athens, 11855 Athens, Greece
Kanellos Toudas: Department of Agribusiness and Supply Chain Management, Agricultural University of Athens, 11855 Athens, Greece
Evangelos I. Poutos: Department of Business Administration, National and Kapodistrian University of Athens, 10559 Athens, Greece
Theodoros Kounadeas: Department of Business Administration, National and Kapodistrian University of Athens, 10559 Athens, Greece
Stefanos Tsavalias: Department of Business Administration, Business College of Athens, 15784 Athens, Greece

Energies, 2022, vol. 15, issue 10, 1-10

Abstract: This paper aimed to research the interrelation between capital structure, corporate governance, equity ownership, and how they affect firm performance. The sample used consisted of 10 leading-energy-sector companies traded in the NYSE, most of which rank among the largest companies in the world by market capitalization, while the US-based ones are also Fortune 500 companies. Over the eleven-year period examined, from 2009 to 2019, a sampling frame of 110 data series was gathered and analyzed using panel data methodologies. The impact of the key parameters of capital structure, corporate governance, and equity ownership was tested using regression analysis (panel data method) on firm performance, measured by profitability. Our results support a significant relation among major capital structure and corporate governance parameters and firm performance, whereas no evidence was found to support a significant impact of equity ownership on the dependent variable found ascertained. Furthermore, our findings support that in our sample firms, pecking order and agency cost theories play an important role in the financing of these firms, while static trade and irrelevance theory find no support.

Keywords: capital structure; corporate governance; firm performance; equity ownership; regression analysis (panel data method); capital structure theories; profitability; energy sector (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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