EconPapers    
Economics at your fingertips  
 

CORPORATE CAPITAL STRUCTURE CHOICES IN MENA: EMPIRICAL EVIDENCE FROM NON-LISTED FIRMS IN MOROCCO

Lahcen Achy ()

Middle East Development Journal (MEDJ), 2009, vol. 01, issue 02, 255-273

Abstract: Based on their perceptions, more than three quarters of Moroccan manufacturing firms have identified access to finance as one of the major constraints affecting their performance. However, compared to a number of emerging countries, Moroccan firms appear relatively undercapitalized and more reliant on external finance. These two findings seem contradictory and have very different policy implications. The purpose of this paper is to provide a rigorous understanding of the rationale behind financial choices made by Moroccan firms, and assess the severity of financial constraints they effectively face. The paper uses a panel dataset covering 550 non-listed manufacturing firms over the period 1998ȓ2003 and investigates both long-term and short-term measures of leverage with the objective of understanding the factors that shape "debt-equity choice" as well as "debt maturity structure".Our analysis reveals the existence of a negative relationship between asset tangibility and both aggregate leverage and short-term debt ratio. However, no clear cut relationship between asset tangibility and long-term debt is uncovered. Small firms tend to increase their debt instead of opening their capital to outside investors and larger firms seem to rely much more on their retained earnings for their long-term financial needs. For short-term debt, size does not appear to matter. The impact of growth is positive on short-term leverage and irrelevant for long-term leverage. Finally, profitability exerts a positive effect on long-term leverage and a negative one on short-term leverage.

Keywords: Financial structure; debt-equity choice; debt maturity issue; manufacturing firms (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1793812009000127
Access to full text is restricted to subscribers

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: https://EconPapers.repec.org/RePEc:wsi:medjxx:v:01:y:2009:i:02:n:s1793812009000127

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1793812009000127

Access Statistics for this article

Middle East Development Journal (MEDJ) is currently edited by Lyn Squire

More articles in Middle East Development Journal (MEDJ) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().

 
Page updated 2021-04-05
Handle: RePEc:wsi:medjxx:v:01:y:2009:i:02:n:s1793812009000127