Institutions and corporate capital structure in the MENA region

Mohamed Belkhir; Aktham Maghyereh; Basel Awartani

doi:10.1016/j.ememar.2016.01.001

Institutions and corporate capital structure in the MENA region

Mohamed Belkhir, Aktham Maghyereh, Basel Awartani

Research output: Contribution to journal › Article › peer-review

64 Citations (Scopus)

Abstract

This paper provides novel evidence on firm- and country-level determinants of firm capital structure decisions in the MENA region. Using a sample of 444 listed firms from ten countries, over the 2003-2011 period, we find that MENA firms have target leverage ratios towards which they adjust over time. Yet, the speed of adjustment varies from one country to another. Our findings also suggest that some firm-level factors are associated with leverage consistent with the trade-off and pecking order theories of capital structure. We further find robust evidence that better institutional quality leads firms to use more debt.

Original language	English
Pages (from-to)	99-129
Number of pages	31
Journal	Emerging Markets Review
Volume	26
DOIs	https://doi.org/10.1016/j.ememar.2016.01.001
Publication status	Published - Mar 1 2016

Keywords

Capital structure
Financial development
Institutions
Leverage
MENA

ASJC Scopus subject areas

Business and International Management
Economics and Econometrics

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10.1016/j.ememar.2016.01.001

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title = "Institutions and corporate capital structure in the MENA region",

abstract = "This paper provides novel evidence on firm- and country-level determinants of firm capital structure decisions in the MENA region. Using a sample of 444 listed firms from ten countries, over the 2003-2011 period, we find that MENA firms have target leverage ratios towards which they adjust over time. Yet, the speed of adjustment varies from one country to another. Our findings also suggest that some firm-level factors are associated with leverage consistent with the trade-off and pecking order theories of capital structure. We further find robust evidence that better institutional quality leads firms to use more debt.",

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AB - This paper provides novel evidence on firm- and country-level determinants of firm capital structure decisions in the MENA region. Using a sample of 444 listed firms from ten countries, over the 2003-2011 period, we find that MENA firms have target leverage ratios towards which they adjust over time. Yet, the speed of adjustment varies from one country to another. Our findings also suggest that some firm-level factors are associated with leverage consistent with the trade-off and pecking order theories of capital structure. We further find robust evidence that better institutional quality leads firms to use more debt.

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KW - Financial development

KW - Institutions

KW - Leverage

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Institutions and corporate capital structure in the MENA region

Abstract

Keywords

ASJC Scopus subject areas

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