Capital structure of social purpose companies -- a panel data analysis

Aleksandra Szymańska, Stijn Van Puyvelde and Marc Jegers

Journal of Sustainable Finance & Investment, 2015, vol. 5, issue 4, 234-254

Abstract: This paper examines the determinants of borrowing decisions of social enterprises. Following the streams of research dealing with for-profit firms and non-profit organisations, we apply a panel data analysis of 2228 Belgian social purpose companies over the period of 2004--2013. We find that, in their capital structures, Belgian social purpose companies show a high dependence on financial determinants such as profitability, nature of assets, growth opportunities, size, the probability of agency problem and the previous year's leverage. They also demonstrate a high susceptibility to activity domain, legal form, region and evolution over time. Our results are in line with the mainstream literature on both for-profit organisations and non-profit organisations. We conclude that the capital structure of social enterprises mixes features of both research streams.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:taf:jsustf:v:5:y:2015:i:4:p:234-254

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DOI: 10.1080/20430795.2015.1089829

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