Abstract Title: Determinants of Capital Structure: Evidence from the Global Renewable Energy Sector

Key words: capital structure determinants; renewable energy companies; leverage; trade-off theory; pecking order theory Purpose: The main purpose of this master thesis is to determine the factors that significantly influence the capital structure decisions in the global renewable energy sector during the period 2005-2013. Methodology: This study is implemented through a quantitative approach, using a panel data model, in which leverage is the dependent variable, controlled by a set of firm-specific, industry-specific, tax-related and macroeconomic independent variables. Theoretical The study is inspired by prior researches, which test capital structure Perspectives: determinants and whether the trade-off or the pecking order theory explains companies ’ leverage decisions better. Empirical 67 renewable energy companies, part of RENIXX ® (Renewable Foundation: Energy Industrial Index) during the period 2005-2013. All data was obtained from Thomson Reuters Eikon and Datastream. Conclusions: Our regression analysis reveals that the determinants which are positively and significantly correlated with leverage are size, tangibility and median industry leverage. We find that profitability, market-to-book assets, SG&A expenses to revenues, dividends to assets, listed firms dummy and common law dummy are in negative and significant relation with leverage. Overall, the global financial crisis did not have a strong impact on the majority of determinants affecting capital structure decisions in the studied sector. Our results are consistent with the framework of the dynamic trade-off theory