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

Research output: Contribution to journalArticle

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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