Targeting optimal capital structure after the 2008 financial crisis: evidence from Romania

This paper investigates the adjustment financing behaviour of the Romanian listed companies, to the optimal capital structure, after the 2008 financial crisis. The results of the dynamic panel data estimation reveal that, after the crisis, Romanian firms exhibit a notably low adjustment speed to the optimal capital structure. According to the theory, our premise is that the companies do not try to reach this optimal capital structure due to the associated costs which characterize the Romanian market, making the country very distinctive in this respect within the CEE region. In addition, the results of the dynamic model estimation indicate that profitability, liquidity, and firm’s size are the most important determinants of the capital structure for Romanian listed firms.