Open AccessFirm Level Determinants of Capital Structure: Evidence From Egypt
Author(s) -
Ahmed Sakr,
Amina Bedeir
Publication year - 2018
Publication title -
international journal of financial research
Language(s) - English
Resource type - Journals
eISSN - 1923-4031
pISSN - 1923-4023
DOI - 10.5430/ijfr.v10n1p68
Subject(s) - pecking order theory , capital structure , pecking order , agency cost , economics , order (exchange) , principal–agent problem , empirical evidence , agency (philosophy) , financial capital , capital (architecture) , business , monetary economics , financial economics , finance , microeconomics , debt , corporate governance , profit (economics) , history , philosophy , archaeology , epistemology , evolutionary biology , biology , shareholder
The purpose of this paper is to investigate the firm level determinants of capital structure of Egyptian publicly traded non-financial firms. The study investigates the firm level determinants of capital structure of Egyptian companies utilising data from the financial statements of 62 listed companies over the time period from 2003 to 2016. The study investigates whether the capital structure decisions in Egypt are closer to the assumptions of Trade-Off Theory, of Pecking Order Theory or of the Agency Cost Theory. The empirical evidence obtained allows us to conclude that Trade-Off and Pecking Order Theories are the most theories to describe the financial behaviour of the Egyptian companies' choice of capital structure whereas there was little evidence to support the agency cost theory.