Latest Issue



The impact of debt burden on performance of russian companies


Full article 

Nekrasova G. A. – Pitirim Sorokin Syktyvkar State University, Syktyvkar, Russia; Senior Lecturer, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Badokina E. A. – Candidate of Economic Sciences, Professor, Head of Department of Financial Management, Pitirim Sorokin Syktyvkar State University, Syktyvkar, Russia e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In the financial management of the company, one of the key aspects is the formation and optimization of the capital structure. Making decisions about the choice of sources of financing, management, as a rule, focuses on such criteria as: maximizing the market value of the company, maximizing the profitability of owners, improving indicators that directly reflect the efficiency of internal business processes. The article is devoted to testing hypotheses about the impact of the debt level on the performance of Russian companies in various industries, expressed by indicators of profitability. The analysis had shown that the level of companies’ borrowings is more than a third of the gross domestic product, volume of debt is growing in dynamics, the level of debt varies significantly by industry (it is higher in construction and manufactur-ing industries and less in the segments of transport and communication and production and distribution of electricity gas and water). Evaluation of the impact of the debt burden on the return on assets and the return on margin, based on the regression model, showed partial confirmation of the hypothesis of the negative impact of debt on the profitability in sev-eral industries. In other sectors, positive correlation has been established. For all considered segments the significance of industry characteristics (tangibility, firm size, growth potential, liquidity) in explaining variations in profitability was con-firmed. The results show a close relationship between decisions on the formation of the capital structure and the compa-ny's performance and can be taken into account by the management of Russian companies for the development and im-provement of financial strategies.

Keywords: sources of financing, debt burden, profitability, capital structure, industry analysis.


1. Makarova S. G., Velikorossova E. N. Osobennosti formirovaniya struktury kapitala kompanij v razlichnyh otraslyah rossijskoj ekonomiki [Features of the formation of the capital structure of companies in various sectors of the Russian economy]. Audit i finansovyj analiz [Audit and financial analysis], 2014, No. 2, pp. 425–438 (In Russian).
2. Hassan, L., Samour, S., 2015. Capital Structure and Firm Performance: Did the Financial Crisis Matter? A cross-industry study. M. S. thesis, Uppsala Univ., Uppsala.
3. Grossman, S. J., Hart, O. D., 1982. Corporate financial structure and managerial incentives. The Economics of Infor-mation and Uncertainty. Chicago: University of Chicago Press, pp. 107–140.
4. Stulz, R. M., 1990. Managerial discretion and optimal financing policies. The Journal of Financial Economics, 1: 3–27. DOI: 10.1016/0304-405X(90)90011-N.
5. Ebaid, I. E., 2009. The impact of capital structure choice on firm performance: empirical evidence from Egypt. The Journal of Risk Finance, 10(5): 477–487. DOI: 10.1108/15265940911001385
6. Pöyry, S., Maury, B., 2010. Influential ownership and capital structure. Managerial and Decision Economics, 31: 311–324. DOI: 10.1002/mde.1477.
7. Ivashkovskaya I. V., Stepanova A. N., Kokoreva M. S. Finansovaya arhitektura kompanij. Sravnitel'nye issledovaniya na razvityh i razvivayushchihsya rynkah [The financial architecture of companies. Comparative studies in developed and developing markets]. Moscow: INFRA-M, 2013. 238 p. (In Russian).
8. Ilyukhin, V. E., 2015. The Impact of Financial Leverage on Firm Performance: Evidence from Russia. Journal of Cor-porate Finance Research, 9(2): 24–36.
9. King, R. G., Levine, R., 1993. Finance and Growth: Schumpeter Might Be Right. Quarterly Journal of Economics, 108: 717–738. DOI: 10.2307/2118406.
10. Lavrushin O. I. Rol' kredita v ekonomicheskom razvitii [The role of credit in economic development]. Bankovskoe delo [Banking], 2011, No. 2, pp. 32–38 (In Russian).
11. Berezinskaya O. B., Shchyolokova D. V. Kreditnye zaimstvovaniya nefinansovogo sektora ekonomiki Rossii [Credit borrowing from the non-financial sector of the Russian economy]. Moscow: Preprint / RANHiGS, 2016. 47 p. (In Russian)
12. Donec S. A., Ponomarenko A. A. Indikatory dolgovoj nagruzki [Indicators of debt load]. Den'gi i kredit [Money and credit], 2017, No. 4, pp. 5–13.
13. Edinaya mezhvedomstvennaya informacionno-statisticheskaya sistema (EMISS) [Unified Interdepartmental Information and Statistical System]. Available at: (Accessed: 30.11.2019).            14. Oficial'nyj sajt Central'nogo banka Rossijskoj Federacii [The official website of the Central Bank of the Russian Federation]. Available at: (Accessed: 30.11.2019).
15. MacKay, P., Phillips, G. M., 2005. How Does Industry Affect Firm Financial Structure? Review of Financial Studies, 18(4): 1433–1466. DOI: 10.1093/rfs/hhi032.
16. Popova S., Karlova N., Ponomarenko A., Deryugina E. Analiz dolgovoj nagruzki v otraslyah rossijskoj ekonomiki [Debt analysis in the sectors of the Russian economy]. Bank Rossii. Seriya dokladov ob ekonomicheskih issledovaniyah [Bank of Russia. A series of reports on economic research], 2018. No. 29, 51 p.
17. Zeitun, R., Tian, G., 2007. Capital structure and corporate performance: evidence from Jordan. Australasian Account-ing. Business and Finance Journal, 1(4): 40–61. DOI: 10.1016/j.sbspro.2012.11.105.

For citation: Nekrasova G. A., Badokina E. A. The impact of debt burden on performance of Russian compa-nies // Corporate governance and innovative economic development of the North: Bulletin of the Research Cen-ter of Corporate Law, Management and Venture Capital of Syktyvkar State University. 2019. No. 4. Рр. 81–91. DOI: 10.34130/2070-4992-2019-4-81-91.