Exploring the Relationship Between Capital Structure and SME Profitability: A Case Study of Lusaka's Electronic Device Market

Redson Mankishi, Austin Mwange and Windu Matoka
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Redson Mankishi: Graduate School of Business, University of Zambia
Austin Mwange: Graduate School of Business, University of Zambia
Windu Matoka: School of Business, ZCAS University, Zambia

East African Finance Journal, 2025, vol. 4, issue 1

Abstract: The capital structure decisions made by Small and Medium Enterprises within the electronic device market in Lusaka, Zambia, significantly impact their financial health and long-term sustainability. This study examines how financing through debt and equity affects SME profitability using a descriptive research design and panel data analysis. The findings indicate that although financial risk, market conditions, and access to finance influence profitability, their effects are not statistically significant, while improved financing access and favorable market conditions are associated with higher growth prospects.

Keywords: Small and Medium Enterprises; capital structure; profitability (search for similar items in EconPapers)
JEL-codes: G32 L26 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:eafjke:2025-01

DOI: 10.59413/eafj/v4.i1.1

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