The paper investigates the role of sectoral classification to explain the leverage of enterprises in Visegrad Group (V4) countries to gain insights into more resilient and adaptive innovation management practices across industries.
A multi-step quantitative method was employed involving normality testing, non-parametric statistical analysis, and hierarchical cluster analysis using Ward's method. Data analysis was conducted on a dataset of 12,816 enterprises across four countries based on various debt measures, namely total indebtedness and self-financing ratios, as well as debt-to-equity, interest coverage, equity leverage and insolvency ratios. Cluster stability and inter-sector heterogeneity were statistically tested.
Empirical evidence confirms that sectoral classification accounts for most of the variation in corporate leverage among the V4 countries. Distinct sector clusters emerge, following industry-specific financial behaviour and economic conditions. Most importantly, the approach reveals heterogeneity in financing through long-term debt, suggesting the need for sector-specific finance strategies to support the innovation potential. International research indicates both convergence and divergence in sectoral debt trends, influenced by regional institutional factors.
This research fills an important empirical gap by focussing on Central and Eastern Europe, a region that is often underrepresented in capital structure literature. By applying a set of multi-sectoral, cross-country data and rigorous clustering methods shaping sector-specific conditions for innovation development and implementation, the research presents a nuanced picture of sectoral debt patterns and contributes new insights into the interface between regional economic settings and the financial behaviour of enterprises.
