The Determinants Of Capital Structure: An Empirical Study Of Kuwait Listed Companies | ||||
| المجلة العربية للإدارة | ||||
| Articles in Press, Accepted Manuscript, Available Online from 15 April 2025 PDF (213.95 K) | ||||
| Document Type: بحوث باللغة الإنجلیزیة | ||||
| DOI: 10.21608/aja.2025.355925.1794 | ||||
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| Authors | ||||
Abdulah Alsadan  1; Noureddine Kerrouche 2
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| 1Department of Finance, College of Business Administration in Hawtat bani Tamim, Prince Sattam bin Abdulaziz University, Saudi Arabia. | ||||
| 2Department of Finance, College of Business Administration in Hawtat Bani Tamim, Prince Sattam Bin Abdulaziz University, Al-Kharj, Saudi Arabia | ||||
| Abstract | ||||
| This study investigates the determinants of capital structure, focusing on the impact of firm-specific factors, including size, profitability (ROE), liquidity (QLIQ, CLIQ), growth, and tangibility, on long-term debt (LTD) and total debt (TD). Using a dataset of 889 observations, across 127 firms operating in Bahrain between 2012-2018, the analysis explores variations in the capital structure across firms. The study employs multiple regression models, including Ordinary Least Squares (OLS), Fixed Effects (FE), and Random Effects (RE), to examine the relationships between the independent variables and the dependent variables (LTD and TD). The findings reveal that firm size and tangibility positively and significantly influence both LTD and TD, highlighting the role of larger firms and tangible assets in securing debt financing. Liquidity (QLIQ and CLIQ) and profitability are negatively associated with leverage, supporting the pecking order theory that profitable and liquid firms prefer internal financing. Growth shows weak and inconsistent relationships with debt, suggesting equity preferences for growth-oriented firms. In conclusion, the results align with key capital structure theories, such as the trade-off and pecking order theories, and provide valuable insights into how firm-specific characteristics shape financing decisions. These findings have practical implications for corporate financial managers and policymakers aiming to optimize firms' capital structures. | ||||
| Keywords | ||||
| Capital Structure; Debt; Company size; Profitability; Liquidity | ||||
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