New article by SOCENT researchers Aleksandra Szymanska, Stijn Van Puyvelde and Marc Jegers published in the “Journal of Sustainable Finance and Investment”
“Capital Structure of Social Purpose Companies – A Panel Data Analysis”, by SOCENT researchers Aleksandra Szymanska, Stijn Van Puyvelde and Marc Jegers has been published in the Journal of Sustainable Finance & Investment (5(4), pp. 234-54).
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, the authors apply a panel data analysis of 2,228 Belgian social purpose companies over the period 2004–2013. They 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. Their results are in line with the mainstream literature on both for-profit organisations and non-profit organisations. They conclude that the capital structure of social enterprises mixes features of both research streams.