Factors determining the structure of capital firms basic materials of Brazil

Abstract

This article examines the capital structure of eight companies representing the Basic Materials Index of BM&FBOVESPA in the period 1994-2011. The controversy in the theoretical foundations developed this theme allows new approaches to be lifted in order to increase understanding of the factors that determine the levels of indebtedness of firms. This study opted for the use of financial indicators that represent three areas of interest (profitability, ability to pay and cash) in explaining loan short and long term. The methodological approach was quantitative, through regression analysis with panel data. The initial expectation is that the results met grip on the premises of Pecking Order Theory. Despite the methodological limitations, it was observed that the current liquidity variables, ROA and ROE determine borrowing long and short term, the latter being also influenced by the variables of the financial cycle and asset turnover. However, the degree of influence profitability is distinct for the dependent variables, which indicates the existence of agency conflicts between shareholders and creditors and preference for internal sources in financing assets.