Document Details
|
Document Type |
: |
Article In Journal |
|
Document Title |
: |
The Determinants of the Capital Structure: Evidence from Jordanian Industrial Companies محددات الهيكل المالي: دليل من الشركات الصناعية الأردنية |
|
Document Language |
: |
English |
|
Abstract |
: |
This study examined the capital structure of listed industrial companies on Amman Stock Exchange (ASE) over the period (2001-2005). The findings of this study contribute towards a better understanding of financing behaviour in Jordanian industrial companies. Hypotheses, based on comparing the relationships between Leverage ratio (Lev 1), LTD/TD (Long-term debts/total debts) and five explanatory variables that represent size, tangibility, profitability, long-term debt and short-term debt. To test those relationships regression analysis for Leverage ratio (Lev 1) and model was used to explain determinants of the capital structure of Jordanian industrial companies on the time period (2001 - 2005).
There was a significant positive relationship between leverage ratio (Lev 1) and size (TA), Tangibility (Tang), long-term debt (LTD) and short-term debt (STD) and there was a significant negative relationship between leverage ratio and Profitability of the firm.
In other words, the results of this study showed that a significant positive relationship between LTD/TD and size (TA), Tangibility (Tang), and long-term debt (LTD) and there was a negative relationship between LTD/TD and short-term debt of the firm.
Also, the results showed that Total assets, Tangibility, Long-term debt, had a positive correlation with LTD/TD. While, short-term debt had a negative correlation with LTD/TD.
As well as, Jordanian industrial companies are depending on equity for financing their investments, where, the equity of Jordanian industrial companies represents about (70%) from their total finance. Despite the fact that this correlation matrix ignores joint effects of more than one variable on leverage, the Long-term debt, and Short-term debt are positively related to Tangibility and Total assets. Profitability has a negative correlation with short-term debt and total debt ratios. This implies that (1) Growing companies and companies with high levels of tangible assets tend to use short-term debt rather than long-term debt. (2) Large and profitable companies are less likely to use short-term debt and tend to use less debt overall. |
|
ISSN |
: |
1319-0997 |
|
Journal Name |
: |
Economics and Administration Journal |
|
Volume |
: |
24 |
|
Issue Number |
: |
1 |
|
Publishing Year |
: |
1431 AH
2010 AD |
|
Article Type |
: |
Article |
|
Added Date |
: |
Wednesday, February 24, 2010 |
|
Researchers
| حسني علي خريوش | Khrawish, Husni Ali | Researcher | Doctorate | khrawish@hu.edu.jo |
|
Back To Researches Page
|