Relationship between Business Strategy and Capital Structure

Authors

DOI:

https://doi.org/10.17524/repec.v18i1.3258

Keywords:

Estratégia prospectora, Estratégia defensora, Estrutura de capital

Abstract

Objective: This paper analyzes the relationship between business strategy and capital structure.

Methods:Archival research was conducted with 488 observations of companies listed in Brasil, Bolsa, Balcão [B]3. As proxies of interest, the classification of companies into prospectors and defenders was adopted for business strategy, and the relationship between third-party and equity capital was used for capital structure. The econometric model was performed using ordinary least squares linear multiple regression, controlling for year and sector fixed effects.

Results: The results reveal that business strategy relates to how a company finances its capital. Prospectors tend to depend more heavily on third-party capital, present more significant risks, and lower cash flow profitability than defender companies. In contrast, because defenders seek market dominance and make more conservative decisions, they generate funds internally to finance their activities.

Contributions: These findings show that the aggressive behavior of companies toward capital financing may be linked to the choice of an expansion strategy, indicating that management decisions influence this financial information.

Author Biographies

Caroline Soschinski, Universidade Regional de Blumenau - FURB

Doutora em Ciências Contábeis e Administração no Programa de Pós-Graduação em Ciências Contábeis da Universidade Regional de Blumenau (PPGCC/FURB)

Endereço: Rua Antônio da Veiga, 140 – Sala D202 – Bairro Itoupava Seca, CEP: 89.030-903

Blumenau/SC – Brasil; Telefone: (47) 3321-0565; e-mail: carolinesoschinski@yahoo.com.br

Lattes: http://lattes.cnpq.br/7865346614694739

ORCID: https://orcid.org/0000-0002-0135-0729

 

ALICE CAROLINA AMES, UNIVERSIDADE REGIONAL DE BLUMENAU - FURB

Doutoranda em Ciências Contábeis e Administração no Programa de Pós-Graduação em Ciências Contábeis da Universidade Regional de Blumenau (PPGCC/FURB)

Endereço: Rua Antônio da Veiga, 140 – Sala D202 – Bairro Itoupava Seca, CEP: 89.030-903

Blumenau/SC – Brasil; Telefone: (47) 3321-0565; e-mail: aliceames@hotmail.com

Lattes: http://lattes.cnpq.br/0027513946536184

ORCID: https://orcid.org/0000-0002-8287-8831

Ilse Beuren, Universidade Federal de Santa Catarina - UFSC

Doutora em Controladoria e Contabilidade pela FEA/USP e Professora do Programa de Pós-Graduação em Contabilidade da Universidade Federal de Santa Catarina (UFSC).

Endereço: Universidade Federal de Santa Catarina, Campus Reitor João David Ferreira Lima, s/n, Bairro Trindade. Florianópolis (SC). CEP 88040-970.

E-mail: ilse.beuren@gmail.com

Lattes: http://lattes.cnpq.br/4514517594315817

ORCID: https://orcid.org/0000-0003-4007-6408

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Published

2024-03-28

How to Cite

Soschinski, C., AMES, A. C., & Beuren, I. (2024). Relationship between Business Strategy and Capital Structure. Journal of Education and Research in Accounting (REPeC), 18(1). https://doi.org/10.17524/repec.v18i1.3258

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