BALANCING DEBT AND EQUITY IN EMERGING MARKETS: THE CASE OF UZBEKISTAN’S JOINT-STOCK CORPORATIONS
Abstract
This study investigates capital structure optimization in joint-stock companies in Uzbekistan amid a transforming economic landscape. As the country shifts from a centrally planned to a market-oriented economy, understanding the determinants of debt-to-equity decisions becomes crucial. Drawing upon trade-off and pecking order theories, the paper explores the effects of market volatility, interest rates, inflation, asset tangibility, profitability, and financial regulations on corporate financing behavior. Empirical analysis of Uzbekistan’s automotive and chemical firms from 2013 to 2025 highlights trends in leverage ratios and their relationship to macroeconomic factors. The findings suggest that high interest rates and market uncertainty have led firms to adopt more conservative, equity-based financing strategies. Additionally, the increasing importance of intangible assets, coupled with reforms in financial regulation and currency liberalization, has influenced firms’ capital structure flexibility. By comparing trends across Uzbekistan and other emerging markets, this research offers insights into how local firms can optimize financial stability and performance through strategic capital structure decisions in volatile economic environments.
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