PROFITABILITY AND CAPITAL STRUCTURE OF COMPANIES WITH SOCIAL AND ENVIRONMENTAL PRACTICES: CASE FTSE4GOOD IBEX 35

Abstract

The objective of this research is to analyze if capital structure of companies has an effect on the generation of economic and financial performance in companies that belong to the FTSE4Good Ibex 35 stock index. It contains companies that perform sustainable practices according to the inclusion criteria of the FTSE4Good index. Literature review focuses on the variables that affect the profitability of companies, and the FTSE4Good index. The variables which measure the economic and financial profitability have been established, as well as financial variables related to the leverage, liquidity and size of the companies. The sample used for this study is 24 companies that belong to the FTSE4Good Ibex 35 index during the period 2007 - 2017. Through a panel data regression, it is determined that both economic profitability and profitability are influenced by leverage variables and the size of the company.