THEORETICAL APPROACHES TO MNE CAPITAL STRUCTURE IDENTIFICATION

Abstract

Abstract. The economic meaning of the MNE capital structure and approaches to funding
sources classification have been explored. Their main types and multi-criteria grouping has
been carries out. Along with the five existing criteria that include the traditional approach, the
modified traditional approach, the accounting approach, the term approach, the investor and/or
intermediary type approach and the internal MNE system relation approach the new criterion
of corporate financing sources classification has been developed. Depending on their ability to
amend corporate liabilities structure financing sources can be classified as static that cannot
amend the liabilities structure and dynamic that can alter the liabilities structure. The importance
of financing sources classification into internal and external has been emphasized in the
course of MNE international activity. This is explained by the existence of the global network of
MNE subsidiaries that can accumulate and reallocate huge financial resources. It has also been
defined that major contemporary theoretical and empirical studies of MNE capital structure are
based on the traditional of modified traditional approach of corporate financing sources classification
according to which they are distinguished between shareholders equity and debt. The
approach to the term «corporate capital structure» identification has been enhanced; the author’s
definition has been brought forward.
Key words: MNE capital structure, MNE financing sources, static corporate financing
sources, dynamic sources of corporate financing, equity financing, debt financing, financial
leverage.