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Year 2015, Volume: 2 Issue: 2, 158 - 168, 29.06.2015

Ghassan Omet Talal Al-sharari Bashar Abu Khalaf Hadeel Yaseen

Abstract

References

  • Acedo-Ramirez, M. and Ruiz-Cabestre, F. (2014), Determinants of Capital Structure: United Kingdom Versus
  • Continental European Countries, Journal of International Financial Management and Accounting, 25, p. 237-270. Alipour, M., Mohammadi, M. and Derakhshan, H. (2015), Determinants of Capital Structure: An Empirical Study of Firms in Iran, International Journal of Law and Management, 57, p. 53-83.
  • Al-Qaisi, K. and Shubita, M. (2013), The Determinants of Capital Structure: Palestinian Case, Interdisciplinary
  • Journal of Contemporary Research in Business, 4, p. 385-398. Alzomaia, T. (2014), Capital Structure Determinants of Publicly Listed Companies in Saudi Arabia, International
  • Journal of Business & Finance Research, 8, p. 53-67. Antoniou, A., Guney,Y. and Paudyal,K. (2005), The Determinants of Debt Maturity Structure: Evidence from
  • France, Germany and UK, European Financial Management, 12, p. 161-194. Bevan, A. and J. Danbolt (2000), Capital Structure and its Determinants in the United Kingdom: A
  • Decompositional Analysis, Working Paper, University of Glasgow, mimeo. Booth, L., A. Aivazian, Demirguc – Kunt and V. Maksimovic (2001), Capital Structure in Developing Countries,
  • Journal of Finance, 56, p. 87-130. Daskalakis, N. and Psillaki, M. (2007), Do Country or Firm Factors Explain Capital Structure? Evidence from SMEs in France and Greece, Applied Financial Economics, 2, p. 1-11.
  • De Jong, A. (2008), Capital Structure Around the World: The Roles of Firm- and Country-Specific Determinants,
  • Journal of Banking and Finance, 32, p. 1954-1969.
  • Eldomiaty, T. (2012), Determinants of Corporate Capital Structure: Evidence from an Emerging Economy,
  • International Journal of Commerce and Management, 4, p. 45-62. Feidakis, A. and Rovolis, A. (2012), Capital Structure Choice in European Union: Evidence from the Construction
  • Industry, Applied Financial Economics, 17, p. 989-1002.
  • Fernandez, M., Kumar, R. and Mansour, D. (2013), Determinants of Capital Structure: Evidence from Oman,
  • Arabian Journal of Business and Management Review, 2, p. 34-44. Ghazouani, T. (2013), The Capital Structure through the Trade-Off Theory: Evidence from Tunisian Firm,
  • International Journal of Economics and Financial Issues, 3, p. 625-635. Harris, M. and Raviv ,A. (1991), The Theory of Capital Structure, Journal of Finance, 46, p. 297-355.
  • Jensen, M. (1986), Agency Cost of Free Cash Flow, Corporate Finance and Takeovers, American Economic Review
  • Papers and Proceedings, 76, p. 323-329. Joeveer, K. (2013), Firm, country and macroeconomic determinants of capital structure: Evidence from transition economies, Journal of Comparative Economies, 41, p. 294-308.
  • Koksal, B. and Orman, C. (2015), Determinants of Capital Structure: Evidence from a major Developing Economy,
  • Small Business Economics 44, p. 255-282. Love, I. (2005), Finances of Egyptian Listed Firms, World Bank Policy Research Working Paper 3639.
  • Mefteh, S. and Oliver,B. (2007), Capital Structure Choice: The Influence of Confidence in France, Paper
  • Presented at the French Finance Association Conference, Bordeaux, France. Modigliani, F. and Miller, M. (1958), The Cost of Capital, Corporation Finance, and the Theory of Investment,
  • American Economic Review, 48, p. 261-297. Myers, S. (1977), Determinants of Corporate Borrowing, Journal of Financial Economics, 5, p. 147-175.
  • Myers, S. and Majluf, N. (1984), Corporate Financing and Investment Decisions When Firms Have Information that Investors Do Not Have, Journal of Financial Economics, 13, p. 187-221.
  • Omet, G. and Mashharawe, F. (2003), The Capital Structure Choice in Tax Contrasting Environments: Evidence
  • From the Jordanian, Kuwaiti, Omani and Saudi Corporate Sectors, 10th Annual Conference, Arab Economic Research Conference, Morocco. Omet, G. (2006), Ownership Structure and Capital Structure: Evidence from the Jordanian Capital Market (1995- 2003), Corporate Ownership and Control, 3, p. 99-107.
  • Rajan, R. and Zingales, L. (1995), What Do we Know About Capital Structure? Some Evidence From International
  • Data, Journal of Finance, 50, p. 1421-1460.
  • Shah, A. and Khan, S. (2013), Determinants of Capital Structure: Evidence from Pakistani Panel Data,
  • International Review of Business Research Papers, 4, p. 265-282. Singh, A. and Hamid, J. (1992), Corporate Financial Structures in Developing Countries, IFC Technical Paper No. 1, Washington D.C.
  • Singh, A. (1995), Corporate Financial Patterns in Industrializing Economies: A Comparative Study, IFC Technical
  • Paper No. 2, Washington D.C. Titman, S. and Wessels, R. (1988), The Determinants of Capital Structure Choice, Journal of Finance, 43, p. 1-19.
  • Turk, R. (2015), Financial Decisions and Investment Outcomes in Developing Countries: The Role of Institutions,
  • IMF Working Paper No. 38. Voulgaris, F., Asteriou, D. and Agiomargianakis, G. (2004), Size and Determinants of Capital Structure in the Greek
  • Manufacturing Sector, International Review of Applied Economics, 18, p. 274-262.

DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?

Year 2015, Volume: 2 Issue: 2, 158 - 168, 29.06.2015

Ghassan Omet Talal Al-sharari Bashar Abu Khalaf Hadeel Yaseen

Abstract

The financial economics literature has given the capital structure choice of firms a lot of attention. Indeed, this literature includes not only econometric analysis of the determinants of capital structure, but also surveys of Chief Financial Officers on this financial decision. This paper reports the leverage ratios of listed Saudi and Palestinian non-financial firms and examines whether the differences in the determinants of their ratios are due to firms-specific factors, or country-specific difference. Based on a total of 55 listed Saudi firms and 18 listed Palestinian firms during the period 2006-2012, and using the Seemingly Unrelated Regression, and Panel data Analysis, the results indicate that factors like asset structure and firm profitability impact the capital structure of both sets of firms. However, the differences in their impact are due to country-specific and not firm-specific factors. This result is not really surprising given that both sets of firms operated under different political and economic circumstances.

References

  • Acedo-Ramirez, M. and Ruiz-Cabestre, F. (2014), Determinants of Capital Structure: United Kingdom Versus
  • Continental European Countries, Journal of International Financial Management and Accounting, 25, p. 237-270. Alipour, M., Mohammadi, M. and Derakhshan, H. (2015), Determinants of Capital Structure: An Empirical Study of Firms in Iran, International Journal of Law and Management, 57, p. 53-83.
  • Al-Qaisi, K. and Shubita, M. (2013), The Determinants of Capital Structure: Palestinian Case, Interdisciplinary
  • Journal of Contemporary Research in Business, 4, p. 385-398. Alzomaia, T. (2014), Capital Structure Determinants of Publicly Listed Companies in Saudi Arabia, International
  • Journal of Business & Finance Research, 8, p. 53-67. Antoniou, A., Guney,Y. and Paudyal,K. (2005), The Determinants of Debt Maturity Structure: Evidence from
  • France, Germany and UK, European Financial Management, 12, p. 161-194. Bevan, A. and J. Danbolt (2000), Capital Structure and its Determinants in the United Kingdom: A
  • Decompositional Analysis, Working Paper, University of Glasgow, mimeo. Booth, L., A. Aivazian, Demirguc – Kunt and V. Maksimovic (2001), Capital Structure in Developing Countries,
  • Journal of Finance, 56, p. 87-130. Daskalakis, N. and Psillaki, M. (2007), Do Country or Firm Factors Explain Capital Structure? Evidence from SMEs in France and Greece, Applied Financial Economics, 2, p. 1-11.
  • De Jong, A. (2008), Capital Structure Around the World: The Roles of Firm- and Country-Specific Determinants,
  • Journal of Banking and Finance, 32, p. 1954-1969.
  • Eldomiaty, T. (2012), Determinants of Corporate Capital Structure: Evidence from an Emerging Economy,
  • International Journal of Commerce and Management, 4, p. 45-62. Feidakis, A. and Rovolis, A. (2012), Capital Structure Choice in European Union: Evidence from the Construction
  • Industry, Applied Financial Economics, 17, p. 989-1002.
  • Fernandez, M., Kumar, R. and Mansour, D. (2013), Determinants of Capital Structure: Evidence from Oman,
  • Arabian Journal of Business and Management Review, 2, p. 34-44. Ghazouani, T. (2013), The Capital Structure through the Trade-Off Theory: Evidence from Tunisian Firm,
  • International Journal of Economics and Financial Issues, 3, p. 625-635. Harris, M. and Raviv ,A. (1991), The Theory of Capital Structure, Journal of Finance, 46, p. 297-355.
  • Jensen, M. (1986), Agency Cost of Free Cash Flow, Corporate Finance and Takeovers, American Economic Review
  • Papers and Proceedings, 76, p. 323-329. Joeveer, K. (2013), Firm, country and macroeconomic determinants of capital structure: Evidence from transition economies, Journal of Comparative Economies, 41, p. 294-308.
  • Koksal, B. and Orman, C. (2015), Determinants of Capital Structure: Evidence from a major Developing Economy,
  • Small Business Economics 44, p. 255-282. Love, I. (2005), Finances of Egyptian Listed Firms, World Bank Policy Research Working Paper 3639.
  • Mefteh, S. and Oliver,B. (2007), Capital Structure Choice: The Influence of Confidence in France, Paper
  • Presented at the French Finance Association Conference, Bordeaux, France. Modigliani, F. and Miller, M. (1958), The Cost of Capital, Corporation Finance, and the Theory of Investment,
  • American Economic Review, 48, p. 261-297. Myers, S. (1977), Determinants of Corporate Borrowing, Journal of Financial Economics, 5, p. 147-175.
  • Myers, S. and Majluf, N. (1984), Corporate Financing and Investment Decisions When Firms Have Information that Investors Do Not Have, Journal of Financial Economics, 13, p. 187-221.
  • Omet, G. and Mashharawe, F. (2003), The Capital Structure Choice in Tax Contrasting Environments: Evidence
  • From the Jordanian, Kuwaiti, Omani and Saudi Corporate Sectors, 10th Annual Conference, Arab Economic Research Conference, Morocco. Omet, G. (2006), Ownership Structure and Capital Structure: Evidence from the Jordanian Capital Market (1995- 2003), Corporate Ownership and Control, 3, p. 99-107.
  • Rajan, R. and Zingales, L. (1995), What Do we Know About Capital Structure? Some Evidence From International
  • Data, Journal of Finance, 50, p. 1421-1460.
  • Shah, A. and Khan, S. (2013), Determinants of Capital Structure: Evidence from Pakistani Panel Data,
  • International Review of Business Research Papers, 4, p. 265-282. Singh, A. and Hamid, J. (1992), Corporate Financial Structures in Developing Countries, IFC Technical Paper No. 1, Washington D.C.
  • Singh, A. (1995), Corporate Financial Patterns in Industrializing Economies: A Comparative Study, IFC Technical
  • Paper No. 2, Washington D.C. Titman, S. and Wessels, R. (1988), The Determinants of Capital Structure Choice, Journal of Finance, 43, p. 1-19.
  • Turk, R. (2015), Financial Decisions and Investment Outcomes in Developing Countries: The Role of Institutions,
  • IMF Working Paper No. 38. Voulgaris, F., Asteriou, D. and Agiomargianakis, G. (2004), Size and Determinants of Capital Structure in the Greek
  • Manufacturing Sector, International Review of Applied Economics, 18, p. 274-262.
There are 35 citations in total.

Details

Journal Section Articles
Authors

Ghassan Omet This is me

Talal Al-sharari This is me

Bashar Abu Khalaf This is me

Hadeel Yaseen This is me

Publication Date June 29, 2015
Published in Issue Year 2015 Volume: 2 Issue: 2

Cite

APA Omet, G., Al-sharari, T., Khalaf, B. A., Yaseen, H. (2015). DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?. Research Journal of Business and Management, 2(2), 158-168. https://doi.org/10.17261/Pressacademia.2015211504
AMA Omet G, Al-sharari T, Khalaf BA, Yaseen H. DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?. RJBM. November 2015;2(2):158-168. doi:10.17261/Pressacademia.2015211504
Chicago Omet, Ghassan, Talal Al-sharari, Bashar Abu Khalaf, and Hadeel Yaseen. “DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?”. Research Journal of Business and Management 2, no. 2 (November 2015): 158-68. https://doi.org/10.17261/Pressacademia.2015211504.
EndNote Omet G, Al-sharari T, Khalaf BA, Yaseen H (November 1, 2015) DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?. Research Journal of Business and Management 2 2 158–168.
IEEE G. Omet, T. Al-sharari, B. A. Khalaf, and H. Yaseen, “DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?”, RJBM, vol. 2, no. 2, pp. 158–168, 2015, doi: 10.17261/Pressacademia.2015211504.
ISNAD Omet, Ghassan et al. “DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?”. Research Journal of Business and Management 2/2 (November 2015), 158-168. https://doi.org/10.17261/Pressacademia.2015211504.
JAMA Omet G, Al-sharari T, Khalaf BA, Yaseen H. DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?. RJBM. 2015;2:158–168.
MLA Omet, Ghassan et al. “DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?”. Research Journal of Business and Management, vol. 2, no. 2, 2015, pp. 158-6, doi:10.17261/Pressacademia.2015211504.
Vancouver Omet G, Al-sharari T, Khalaf BA, Yaseen H. DETERMINANTS OF CAPITAL STRUCTURE IN VARIOUS CIRCUMSTANCES: COULD THEY BE SIMILAR?. RJBM. 2015;2(2):158-6.

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