Capital Structure of Innovative Companies in BRICS Countries

  • Elettra Agliardi University of Bologna
  • Anton Krupin National Research University Higher School of Economics


This article aims to identify the main business and economic determinants of capital structure in a sample of innovative companies from BRICS countries.

We achieve this by presenting a comparative analysis of 1,437 high-tech and 1,485 non-innovative companies in the pharmaceuticals, electronics, IT, and telecommunications sectors between 2008 and 2015. We conduct a regression analysis using a significant number of variables, such as profitability, size, proportion of tangible assets, and growth potential. The highlighted parameters are then examined in order to identify the characteristic features displayed in the capital structure of innovative firms.

Our results indicate that the following company characteristics are relevant in determining capital structure: information asymmetry costs (those which are associated with the unique activities of innovative companies), high growth potential generated by the availability of network effects, a high innovative applicability, low marginal and transport costs, and a high proportion of intangible assets. Moreover, we found that there is a distinct difference in the capital structure of companies as they vary in levels of innovation. An innovative company’s proportion of intangible assets has a multidirectional effect on the debt amount. The potential for growth is also a significant factor which has a predominantly negative effect on the level of an innovative company’s financial leverage. Levels of borrowing are overall lower for innovative firms.

Our major conclusion, drawing from the results above, is that innovative companies in BRICS countries use relatively little debt in the case of high growth potential. This indicates a general need to overcome the information asymmetry challenge in order to increase the growth rates of individual companies.

The scientific novelty of this analysis relates most strongly to the broadness of scope of our investigation, the focus on BRICS countries specifically, and the applicability of its conclusions in wider business and economic contexts. The breadth of data from a wide range of companies and sectors (both innovative and non-innovative), and the high number of companies utilized in the study, lend our evaluation an undeniable credibility within its scope, especially where it upholds similar conclusions in related literature of narrower focus. As a corollary to this, it may be conceivably asserted that these results are not merely applicable to individual companies, or even sectors of the economy, but due to their wide field of origin, they can have economy-wide implications on business and financial strategies.


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Как цитировать
AgliardiE. и KrupinA. (2019) «Capital Structure of Innovative Companies in BRICS Countries», Journal of Corporate Finance Research / Корпоративные Финансы | ISSN: 2073-0438, 13(3), сс. 71-93. doi: 10.17323/j.jcfr.2073-0438.13.3.2019.71-93.
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