DETERMINANTS OF THE CAPITAL STRUCTURE OF NON-LISTED COMPANIES IN KOSOVO.

The main objective of the study was to examine the determinants of the capital structure of Kosovo companies reporting to the Kosovo Council for Financial Reporting (KCFR). The data is collected from the financial statements of 50 non-listed companies and covers the time period of 2013-2018. The data is pannel and three different models: fixed, random effects, and pooled OLS, were estimated in order to test for the best-fitted model of the determinants of the capital structure of Kosovo companies. The size of the company, liquidity, profitability, assets structure, growth, effective tax rate, financial flexibility, and risk were used as explanatory variables for the capital structure of a company measured by the total debt rate. Several theories of capital structure have been developed to explain company-based capital structure. This study is based on the selection of trade-off and pecking order theory. The results of the study suggest that variables such as the size of a company, assets structure, growth, and financial flexibility influence the measurement of the capital structure of a company in Kosovo, and they are supported by the trade-off and pecking order theory. From the results, we can conclude the negative relationship between the size of a company, liquidity, profitability, assets structure, financial flexibility, risk, and capital structure, affects the management of the company when making borrowing choices. The findings of the study demonstrated the importance of capital structure compounds for the decision on the financial sources of a company in Kosovo. [ABSTRACT FROM AUTHOR]