Capital structure, tax effect, financial crisis and default risk: evidence from emerging market

Rami Zeitun () and Hisham Al Refai

International Journal of Economics and Business Research, 2017, vol. 14, issue 1, 104-113

Abstract: The central objective of this study is to investigate the effect of capital structure on corporate failure in the emerging market, in particular Jordan, using a panel data analysis sample representative of 180 Jordanian companies during the period 1990 to 2012. This paper also examines the effect of the financial crisis 2008 on Jordanian corporate insolvency. The level of corporate leverage was found to have a positive effect on the probability of default (PD). Firms with lower bankruptcy costs have a lower probability of default (PD).

Keywords: capital structure; default risk; financial crisis; Jordan. (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:14:y:2017:i:1:p:104-113

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