Company capital structure’s theoretical framework: historical assessment and trends in the 21st century

Company capital is essential in running business and creating value added for the stakeholders, including economy. How the view on company’s capital structure has evolved from theoretical perspective in the 20th century is needed to be assessed, in order to determine what concepts and theories, if any are relevant in the 21st century. Many theories have competed their way and transformed during the 20th century, while some, i.e. trade-off, signaling and stakeholder theories are still relevant in the 21st century. There are also new trends in the 21st century, new terms and quests shifting from determining and analysing optimal company’s capital structure to sustainable finance, taxonomy and also sustainability in capital structure. Therefore, the aim of this research: to establish existing main theories impacting and analyzing company’s capital structure and to examine the theoretical shift of the theories based on the needs in the 21st century. Authors defined company’s capital structure and determined that during the years 1989–2020, number of research publications has grown significantly, thus validating the need to reassess theoretical background of capital structure theories in the 20th century, as well as to help to determine the trends still relative and emerging from the theoretical and practical aspects to company’s capital structure in the 21st century.