Market timing behaviour, bankruptcy costs and capital structure decisions in MENA: The case of Egypt

Mohamed Sherif

    Research output: Contribution to journalArticlepeer-review

    Abstract

    This paper investigates the determinants of capital structure and in particular the influence of market timing behaviour and bankruptcy costs on leverage decisions in Egypt. Using a panel data model and a range of econometric techniques, it is shown that the effects of market timing on the capital structure of Egyptian listed firms are not consistent over the time. The findings also suggest that bankruptcy cost has a negative impact on leverage ratios and capital structure decisions in the Egyptian companies. In addition, through an analysis of the target capital structure, the paper shows that the Egyptian companies considered here are moving fairly quickly towards their target level of leverage.

    Original languageEnglish
    Pages (from-to)338-352
    Number of pages15
    JournalInternational Journal of Accounting, Auditing and Performance Evaluation
    Volume11
    Issue number3-4
    DOIs
    Publication statusPublished - 2015

    Keywords

    • Bankruptcy costs
    • Capital structure
    • Egypt
    • Emerging markets
    • Market timing

    ASJC Scopus subject areas

    • Accounting
    • Organizational Behavior and Human Resource Management
    • Finance

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