Formation of the capital structure of world TNCs in the context of globalization changes

Onishchuk Kateryna
student of the Odesa National University named after I.I. Mechnikova, Odessa, E-mail: katya22.on@gmail.com, ORCID ID:

Bychkova Nataliia
Doctor of Economics, Professor of the Department of World Economy and International Economic Relations, Odesa National University named after I.I. Mechnikova, Odessa, E-mail: af.nika.d.123@gmail.com, ORCID ID: https://orcid.org/0000-0002-9304-3944

Cite this article:

Onishchuk K., Bychkova N. (2023) Formation of the capital structure of world TNCs in the context of globalization changes. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Formuvannia struktury kapitalu svitovykh TNK v konteksti hlobalizatsiinykh zmin; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 5-6 (306-307), pp. 123-128.

Abstract

The article is devoted to the peculiarities of the formation of the capital structure of global transnational corporations (TNCs) in the context of globalization changes. The research methodology included a comparative analysis of existing literature and empirical data to assess the financial aspects of the activities of international companies in the context of globalization. Based on the results of the study, the factors that most influence the choice of financing sources by corporations were identified. These include market conditions, industry characteristics, regulatory framework, and access to capital markets. TNCs consider a mix of equity and debt financial instruments to optimize their capital structure. The study identifies the significance of understanding the impact of globalization on TNCs' access to capital markets and cross-border investments. This article pays special attention to the reasons why the industry in which the TNC operates can significantly influence the choice of financing sources. For a better understanding, 5 different industries - information technology, finance, healthcare, consumer goods and manufacturing - were chosen, and the level of influence of industry factors on the formation of the corporations capital structure was investigated using regression modeling. The practical significance of the research results lies in providing valuable insights to TNCs and investors on the importance of strategic capital structure decisions. By understanding the dynamics of capital structure formation in a globalized context, TNCs can enhance their financial performance, maximize profitability, and minimize risks. Investors can make informed decisions regarding TNCs' financial health and growth prospects based on their capital structure choices.Overall, this research contributes to the existing body of knowledge on the capital structure of TNCs in the era of globalization. It sheds light on the key determinants and implications of capital structure decisions, providing practical guidance for TNCs to navigate the challenges and opportunities presented by globalization.

Keywords

capital structure, TNC, debt capital, equity capital, return on equity capital, capital structure optimization, debt-toequity ratio.

JEL classification: L230; DOI: 10.32680/2409-9260-2023-5-6-306-307-123-128

UD classification: 339.72:336.64

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