The capital structure choice and financial market liberalization: a panel data analysis and gmm estimation in jordan

• MAGHYEREH, Aktham ^[1]
  1. [1] Hashemite University

     Hashemite University

     Jordania

     
• Localización: Applied econometrics and international development, ISSN 1578-4487, Vol. 4, Nº. 2, 2004, págs. 69-90
• Idioma: inglés
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• Resumen

  • This paper examines the nature and determinants of the capital structure choice of Jordanian non-financial listed companies. It also studies the impact of the financial and economic liberalization on the capital structure choice of these companies. The move from a relatively highly controlled to a more liberalized financial system since the early-1990s should have a significant impact on the extent and nature of the financial decisions of companies. The findings suggest that while much of the explanatory powers of main stream capital structure theories are applicable to the Jordanian companies.

    The empirical evidence also shows that the 1990s liberalization did affect their financial decisions. Moreover, the findings of the paper suggest that Jordanian companies have target leverage ratios and following the financial liberalization, their speed of adjustment to these ratios have, as unexpected, decreased.