Debt Capital in the Financing Structure: Role and Functions Amid Rising Volatility
Usherenko S. V., Gryshchuk A. S.

Usherenko, Svitlana V., and Gryshchuk, Andrii S. (2025) “Debt Capital in the Financing Structure: Role and Functions Amid Rising Volatility.” The Problems of Economy 4:381–389.
https://doi.org/10.32983/2222-0712-2025-4-381-389

Section: Finance and banking

UDC 336.64:005.52:330.131.7

Abstract:
The volatility of both exogenous and endogenous nature spurs a reconsideration of traditional approaches to financial management, particularly in relation to the debt component of capital structure. This article presents a theoretical analysis of the role and functions of debt within the capital structure under conditions of increasing economic uncertainty. It is substantiated that debt serves not only as a source of financial resources but also as a strategic lever for adaptation to shifts in the external environment. Considering current challenges, such as rising interest rates, inflationary pressures, currency instability, and the digitalization of financial markets, the study critically assesses classical approaches to capital structure optimization, emphasizing the need to balance the benefits of financial leverage with the risks of financial fragility. The article systematizes the main theoretical frameworks, including the trade-off theory, pecking order theory, agency theory and signaling theory, and evaluates its applicability under modern conditions. A classification of debt instruments is proposed based on criteria such as funding source, maturity, servicing mechanism, collateralization and degree of innovation, considering their practical relevance in unstable environments. Particular attention is paid to the integration of ESG factors and digital technologies into debt financing strategies. The study concludes that debt, in the contemporary context, is transforming from a tool of growth into a component of financial resilience. The findings may prove valuable for companies developing financing strategies under high uncertainty, as well as for researchers exploring mechanisms to ensure corporate sector stability amid macroeconomic fluctuations. Future research will focus on the empirical analysis of optimal capital structure configurations across industries in the context of macroeconomic instability.

Keywords: debt, capital structure, corporate finance, financial management, fintech, pecking order theory, agency theory, ESG.

Fig.: 1. Tabl.: 2. Bibl.: 18.

Usherenko Svitlana V. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, Department of Corporate Finance and Controlling, Kyiv National Economic University named after Vadym Hetman (54/1 Beresteiskyi Ave., Kyiv, 03057, Ukraine)
Email: usherenko_svitlana@kneu.edu.ua
Gryshchuk Andrii S. – Postgraduate Student, Department of Corporate Finance and Controlling, Kyiv National Economic University named after Vadym Hetman (54/1 Beresteiskyi Ave., Kyiv, 03057, Ukraine)
Email: andrew.gryshchuk@gmail.com

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