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

^*Corresponding author for this work

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

90 Scopus citations

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
State	Published - 1 Mar 2016
Externally published	Yes

Bibliographical note

Publisher Copyright:
© 2016 Elsevier B.V.

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

Cite this

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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.",

keywords = "Capital structure, Financial development, Institutions, Leverage, MENA",

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year = "2016",

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doi = "10.1016/j.ememar.2016.01.001",

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T1 - Institutions and corporate capital structure in the MENA region

AU - Belkhir, Mohamed

AU - Maghyereh, Aktham

AU - Awartani, Basel

PY - 2016/3/1

Y1 - 2016/3/1

N2 - 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.

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.

KW - Capital structure

KW - Financial development

KW - Institutions

KW - Leverage

KW - MENA

UR - https://www.scopus.com/pages/publications/84956947823

U2 - 10.1016/j.ememar.2016.01.001

DO - 10.1016/j.ememar.2016.01.001

M3 - Article

AN - SCOPUS:84956947823

SN - 1566-0141

VL - 26

SP - 99

EP - 129

JO - Emerging Markets Review

JF - Emerging Markets Review

ER -

Institutions and corporate capital structure in the MENA region

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

Access to Document

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Cite this