Zalisko O. The Impact of Global Corporate Capital Structure on Modern TNCs Financial Leverage.

Sources of TNCs' financing are explored. The comparative analysis of existing theories of corporate capital structure is done, their classification is carried out. The economic sense of the term "global corporate capital structure" is also defined. It is being formed on the level of global financial sector and is heavily influenced by the process of TNCs being transformed into global corporations. The global corporate capital structure formation occurs not only in host countries' markets, but in international markets as well as in corporate internal capital markets. The critical assessment of different approaches to defining the term "financial leverage" is given. It is not quite accurate to associate financial leverage solely with debt or indebtedness. It must be related to the economic effect that arises from using debt with fixed interest in corporate capital structure. This effect implies that some of the corporate effectiveness ratios are bound to fluctuate more compared to those of a corporation which has no debt financing. Key directions of cross-border financial leverage are considered. It is reasonable to carry out the analysis of TNC's short-term debt considering the level of current liquidity. The modified short-term debt ratio should be appropriately calculated as a product of the relation of short-term debt to total assets and the relation of the industry average current liquidity ratio to corporation current liquidity ratio. Core factors of TNC global capital structure are analyzed. They are country-specific factors, firm-specific factors and factors of combined influence. These factors are classified into demand and supply factors as well as factors of joint origin. Most factors affect the capital structure of either parent companies or their affiliates as well as of domestic corporations. However, some of them are specific for multinational corporations and to much lesser extent for domestic firms. Exchange rate risk, level of internationalization, political risk, tangibility of assets and a set of behavioral factors are among them. The multi-criterion analysis of the 68 TNCs in 9 industries dataset covering the period between 2000 and 2014 is carried out leading to econometric identification of two sustainable models of cross-border financial leverage: the model of negative financial leverage (includes two submodels: the model of substantial negative financial leverage and the model of moderate negative financial leverage) and the model of the highest global indebtedness. The correlation analysis of corporate capital structure ratios and TNCs' financial efficiency ratios is performed which allows determining the most influential directions of cross-border financial leverage. It can be observed between debt ratio and ROA and between short-term debt ratio and equities' market price.