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

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  • Khémiri, Wafa
  • Noubbigh, Hédi

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.

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  • Khémiri, Wafa & Noubbigh, Hédi, 2018. "Determinants of capital structure: Evidence from sub-Saharan African firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 70(C), pages 150-159.
    • Handle: RePEc:eee:quaeco:v:70:y:2018:i:c:p:150-159
    DOI: 10.1016/j.qref.2018.04.010
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