Indebtedness of North African Firms: Do Family Ownership and Board Attributes Matter?

Oumaima Quiddi () and Badr Habba ()
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Oumaima Quiddi: Cadi Ayyad University
Badr Habba: ESCA Business School / Cadi Ayyad University

A chapter in Eurasian Business and Economics Perspectives, 2021, pp 215-231 from Springer

Abstract: Abstract This paper aims to examine whether family ownership and board characteristics influence the indebtedness of listed firms from North Africa. Our study is a secondary data analysis using ownership, and board data for the period 2014–2018. The sample includes 289 non-financial firms of the region. The GLS random-effects models were appropriate to provide empirical evidence on the effects of family ownership and board attributes (board size, independent directors, and CEO duality) on debt ratio. Other factors are used as control variables (Return on assets, Return on equity, growth opportunities, liquidity ratio, net assets turnover, firm size, and firm age). Findings suggest that family ownership has no significant impact on debt ratio. Among board attributes, only board size affects negatively the debt ratio. Consistent with prior empirical works, findings reveal that growth opportunities and ROE are negatively associated with debt ratio while net assets turnover, firm size, and ROA have a significant positive effect. This study contributes to the growing literature on financing behavior by shedding light on family ownership and governance issues challenging developing countries and by focusing on the indebtedness of firms operating in a less explored region such as North Africa.

Keywords: Family business; Debt; Governance; Financing policy; Panel data (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:eurchp:978-3-030-85304-4_13

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DOI: 10.1007/978-3-030-85304-4_13

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