Capital Structure and Changes in Companies’ Risk during the COVID-19 Pandemic in CEE Countries
The article examines the financial management of companies in the context of the COVID-19 pandemic, in particular, the relationship between their capital structure and risk changes during the pandemic. The study aims to determine how companies’ total, systematic and idiosyncratic risks changed dur...
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| Format: | Article |
| Language: | English |
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Lodz University Press
2025-06-01
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| Series: | Comparative Economic Research |
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| Online Access: | https://czasopisma.uni.lodz.pl/CER/article/view/26848 |
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| _version_ | 1839651381861941248 |
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| author | Jerzy Gajdka Piotr Pietraszewski |
| author_facet | Jerzy Gajdka Piotr Pietraszewski |
| author_sort | Jerzy Gajdka |
| collection | DOAJ |
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The article examines the financial management of companies in the context of the COVID-19 pandemic, in particular, the relationship between their capital structure and risk changes during the pandemic. The study aims to determine how companies’ total, systematic and idiosyncratic risks changed during the COVID-19 pandemic depending on their capital structure. It is based on a sample of companies listed on stock exchanges in Poland, Hungary, Romania and Bulgaria. The study uses a panel data regression model. In all countries analyzed, as well as the group of companies taken collectively, the COVID-19 pandemic positively influenced both total risk, as measured by the volatility of returns, and specific risk measured with the standard deviation of the residuals in Sharpe’s single-index model. The extent to which both kinds of risk increased during the pandemic period appears to have been related to the level of excess leverage: more heavily indebted companies increased their risk more significantly. However, the impact of the pandemic on systematic risk measured with beta coefficients is more ambiguous. A plausible explanation for this result is given.
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| format | Article |
| id | doaj-art-6c41d810b63b47e0b83b974da6a3dff7 |
| institution | Matheson Library |
| issn | 1508-2008 2082-6737 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Lodz University Press |
| record_format | Article |
| series | Comparative Economic Research |
| spelling | doaj-art-6c41d810b63b47e0b83b974da6a3dff72025-06-26T07:00:39ZengLodz University PressComparative Economic Research1508-20082082-67372025-06-0128210.18778/1508-2008.28.14Capital Structure and Changes in Companies’ Risk during the COVID-19 Pandemic in CEE CountriesJerzy Gajdka0https://orcid.org/0000-0003-1870-3129Piotr Pietraszewski1https://orcid.org/0000-0002-0589-0327University of Lodz University of Łódź The article examines the financial management of companies in the context of the COVID-19 pandemic, in particular, the relationship between their capital structure and risk changes during the pandemic. The study aims to determine how companies’ total, systematic and idiosyncratic risks changed during the COVID-19 pandemic depending on their capital structure. It is based on a sample of companies listed on stock exchanges in Poland, Hungary, Romania and Bulgaria. The study uses a panel data regression model. In all countries analyzed, as well as the group of companies taken collectively, the COVID-19 pandemic positively influenced both total risk, as measured by the volatility of returns, and specific risk measured with the standard deviation of the residuals in Sharpe’s single-index model. The extent to which both kinds of risk increased during the pandemic period appears to have been related to the level of excess leverage: more heavily indebted companies increased their risk more significantly. However, the impact of the pandemic on systematic risk measured with beta coefficients is more ambiguous. A plausible explanation for this result is given. https://czasopisma.uni.lodz.pl/CER/article/view/26848capital structureCOVID-19company riskcapital market |
| spellingShingle | Jerzy Gajdka Piotr Pietraszewski Capital Structure and Changes in Companies’ Risk during the COVID-19 Pandemic in CEE Countries Comparative Economic Research capital structure COVID-19 company risk capital market |
| title | Capital Structure and Changes in Companies’ Risk during the COVID-19 Pandemic in CEE Countries |
| title_full | Capital Structure and Changes in Companies’ Risk during the COVID-19 Pandemic in CEE Countries |
| title_fullStr | Capital Structure and Changes in Companies’ Risk during the COVID-19 Pandemic in CEE Countries |
| title_full_unstemmed | Capital Structure and Changes in Companies’ Risk during the COVID-19 Pandemic in CEE Countries |
| title_short | Capital Structure and Changes in Companies’ Risk during the COVID-19 Pandemic in CEE Countries |
| title_sort | capital structure and changes in companies risk during the covid 19 pandemic in cee countries |
| topic | capital structure COVID-19 company risk capital market |
| url | https://czasopisma.uni.lodz.pl/CER/article/view/26848 |
| work_keys_str_mv | AT jerzygajdka capitalstructureandchangesincompaniesriskduringthecovid19pandemicinceecountries AT piotrpietraszewski capitalstructureandchangesincompaniesriskduringthecovid19pandemicinceecountries |