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Financial Decision of Tunisian Firms in the Context of Market Timing Theory

Author

Listed:
  • Ramzi Drissi

    (Carthage University & LIFE Research Unit, Tunisia)

  • Tarek Ghazouani

    (Faculty of Economic Sciences and Management of Tunis, El Manar University, Tunisia)

  • Assaad Ghazouani

    (Faculty of Economic Sciences and Management of Tunis, El Manar University, Tunisia)

Abstract

This work focuses on the study of the determinants of capital structure in the context of the "Market Timing" theory in a sample of 20 Tunisian firms listed on the Tunis Stock Exchange during the period 2004-2010. The empirical analysis shows that the results are inconclusive regarding the relevance of certain variables from this theoretical framework due to various reasons including market inefficiency. We can also invoke the behavioral dimension of Tunisian companies insofar as direct finance is not often the preferred alternative by the agents as well as to those in need financing capacity.

Suggested Citation

  • Ramzi Drissi & Tarek Ghazouani & Assaad Ghazouani, 2013. "Financial Decision of Tunisian Firms in the Context of Market Timing Theory," International Journal of Economics and Financial Issues, Econjournals, vol. 3(4), pages 923-931.
    • Handle: RePEc:eco:journ1:2013-04-13
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    More about this item

    Keywords

    Capital structure; Market Timing Theory; Market to Book Ratio; Panel Data;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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