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Capital financing behaviour: evidence from firms listed on the Nairobi Stock Exchange

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  • Rose Ngugi

Abstract

This study investigates the determinants of capital structure for a sample of 22 firms listed on the Nairobi Stock Exchange during the period 1991-1999. Reduced form equations derived from the static trade-off model and the pecking order hypothesis are estimated and tested using panel data techniques. The results show that a pecking order model with an adjustment process cannot be rejected. Specifically, it is found that the main determinants of capital financing behaviour consist of information asymmetries, non-debt tax shields and local capital market infrastructure.

Suggested Citation

  • Rose Ngugi, 2008. "Capital financing behaviour: evidence from firms listed on the Nairobi Stock Exchange," The European Journal of Finance, Taylor & Francis Journals, vol. 14(7), pages 609-624.
  • Handle: RePEc:taf:eurjfi:v:14:y:2008:i:7:p:609-624
    DOI: 10.1080/13518470802042245
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    Cited by:

    1. A.O. Olakunle & P.L. Jones, 2014. "Assessing the Impact of Size on the Capital Structure Choice for Listed Nigeria Firms," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(7), pages 184-202, July.
    2. Owen Nyang'oro, 2016. "Determinants of Capital Structure of Listed Firms in Kenya and the Impact of Corporate Tax," Research Papers RP_329, African Economic Research Consortium.

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