Determinants of Capital Structure: Evidence from Saudi Arabia

Abdullah E. Twairesh

Article Details

Determinants of Capital Structure: Evidence from Saudi Arabia

Authors:

Abdullah E. Twairesh

Publisher:

Kuwait University

Journal:

Arab Journal of Administrative Sciences Vol.22 Issue 2, pp.261-233

Document Type:

Article

Publication Date:

1/2015

Document Language:

English

Document ID (Org No.):

2001943664

pISSN:

2957-3521

Keywords:

Abstract:

 The purpose of this study is to examine the determinants of capital structure of companies listed on the Saudi Stock Exchange (SSE). More specifically, it attempts to determine what factors affect capital structure of those companies. The analysis is based on panel data techniques covering the period from 2004 to 2012 with 720 firm-year observations. The study develops seven testable research hypotheses and uses panel data analysis. We estimate the determinants for a given firm capital structure through fixed effects model. The results show that the average of debt ratio is (24%). The results also show that profitability and liquidity have negative and statistically significant impact on the firm leverage in the Saudi context. However, factors such as tangibility, firm size, and growth are found to be positively related to firm leverage. The results also show that risk and firm age are not statistically significant determinants of capital structure in Saudi Arabia.

Article Details

Determinants of Capital Structure: Evidence from Saudi Arabia

Authors:

Abdullah E. Twairesh

Publisher:

Kuwait University

Journal:

Arab Journal of Administrative Sciences Vol.22 Issue 2, pp.261-233

Document Type:

Article

Publication Date:

1/2015

Document Language:

English

Document ID (Org No.):

2001943664

pISSN:

2957-3521

Financial structure

Swap theory

Sequence of financing sources theory

Financial leverage

Profitability

Saudi financial market

Issues

Article Details

Determinants of Capital Structure: Evidence from Saudi Arabia

Authors: Abdullah E. Twairesh

Publisher: Kuwait University

Journal: Arab Journal of Administrative Sciences Vol.22 Issue 2, pp.261-233

Document Type: Article

Publication Date: 1/2015

Document Language: English

Document ID (Org No.): 2001943664

pISSN: 2957-3521

Financial structure

Swap theory

Sequence of financing sources theory

Financial leverage

Profitability

Saudi financial market

Issues

Authors:

Abdullah E. Twairesh

Publisher:

Kuwait University

Journal:

Arab Journal of Administrative Sciences Vol.22 Issue 2, pp.261-233

Document Type:

Article

Publication Date:

1/2015

Document Language:

English

Document ID (Org No.):

2001943664

pISSN:

2957-3521