Can tangible assets be determinant in capital structure including profitability? Comparative analysis on the Hungarian and the French wine industries

ABSTRACT

The main purpose of the study (This study is based on the previous work of the authors: Profitability and capital structure: An empirical study of French and Hungarian wine producers in 2004-2013. Business System Research, 7(1), 89–103, 2016) is to analyze the capital structure of the Hungarian and the French wine industries and to examine the funding models including that of the pledgeable assets rate for collateral. First, the database and the applied methods with the appropriate conditions will be described followed by an in-depth descriptive statistical analysis of a specific industry, namely, the wine industry in Hungary and in France. The analysis identifies the capital structure policy applied in the industry, evaluates its performance in terms of profitability and efficiency, and lastly defines the accessibility for external financing sources. The analysis examines the differences between the funding policies applied in the two countries, especially those variables that are the basis for the separation of the two branches. This was carried out by means of discriminant analysis, which indicates the financing characteristics. To draw a conclusion, the study revealed that the capital structure is significantly different in the examined countries, taking into consideration the profitability and the rate of assets that can also serve as collateral.

KEYWORDS:

• Capital structure
• discriminant analysis
• profitability
• tangibility

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCiD

Daniel Boda http://orcid.org/0000-0001-5379-0892

Gabor Szucs http://orcid.org/0000-0003-3211-9690

Notes

1. http://bor.mandiner.hu/cikk/20160307_szechenyi_istvan_elhibaztuk.