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Determinants of capital structure: Evidence from sub-Saharan African firms

Wafa Khémiri and Hédi Noubbigh

The Quarterly Review of Economics and Finance, 2018, vol. 70, issue C, 150-159

Abstract: This paper examines the determinants of leverage firms in five sub-Saharan African countries (South Africa, Ghana, Kenya, Nigeria and Zimbabwe) over the period 2006–2016. The results of the System GMM estimation and quadratic methods supports the predictions of the trade-off theory and the pecking order theory. They also show a significant inverse U-shaped relationship between the firm's performance and its leverage. Moreover, prior leverage and macroeconomic factors are robust determinants of the level of debt.

Keywords: Capital structure; Trade-off theory; Pecking order theory; Non-financial firms; Dynamic panel data; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2018
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