European automotive industry: A research on its capital structure and determinant factors

Abstract

The aim of this dissertation paper is to thoroughly examine the highly important sector of automotive industry and more specifically the firms based on Europe. The continuously changing economic environment of the last year made the automotive industry in general field to examine and focus on. To begin with there will be a presentation of what is generally held about capital structure of firms until now. A detailed analysis of what applies specifically for manufacturing firms will be given. Thereafter, the focus will be given on the automobile industry. More specifically, there will be a thorough presentation of all the automobile manufacturers based on European ground. Following, specific attention will be given to the capital structure of the major parent car manufacturing companies. Afterwards, a regression model will be developed in order to examine the relationship and the impact that profitability might have to the firms’ capital structure. In addition, in the same way will be examined whether there is a relationship among the firm’s stock performance and its capital structure. The sample to be used will be the ratios and stock prices of the seven European parent car manufacturing corporations for the period of the last ten years.