Economics at your fingertips  

Rising corporate debt and value relevance of supply-side factors in South Africa

Michael Machokoto (), Geofry Areneke and Boulis Maher Ibrahim

Journal of Business Research, 2020, vol. 109, issue C, 26-37

Abstract: Motivated by the recent discovery of a significant increase in corporate debt in developed countries, we use a large sample of 775 listed companies to examine the dynamics and determinants of South African corporate debt. We find an 89% increase in the leverage of the average firm, from 11% in 1990 to 21% in 2015. Long-term and short-term debt increased by 103% and 67%, respectively. We find that this increase is pervasive, and cannot be explained entirely by either firm attributes or macroeconomic factors, despite the importance of the latter. Instead, we find supply-side factors to be the main determinants of the upward trend in corporate debt, highlighting their importance to corporate debt policies in emerging economies.

Keywords: Corporate debt; Supply-side factors; Demand-side factors; Financial constraints; Emerging markets (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jbusres.2019.11.039

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-12-09
Handle: RePEc:eee:jbrese:v:109:y:2020:i:c:p:26-37