The financing behaviour of firms and financial crisis. Issue 12 (1st December 2014)

• Record Type: Journal Article
• Authors: M. Hull, Robert; Danso, Albert; Adomako, Samuel
• Is Part Of: Managerial finance. Volume 40:Issue 12(2014)
• Page Start: 1159
• Page End: 1174
• Publication Date: 2014-12-01
• Subjects: Corporations -- Finance -- Periodicals; Business enterprises -- Finance -- Periodicals; 658.1505
• DOI: 10.1108/MF-04-2014-0098
• Languages: English
• ISSNs: 0307-4358

Abstract

<abstract> <title> <x content-type="archive" xml:space="preserve">Abstract</x> </title> <sec> <title content-type="abstract-heading">Purpose</title> <p> – The purpose of this paper is to contribute to the capital structure literature by examining the determinants of capital structure from the context of South Africa and to provide evidence of the effects of the 2007/2008 global financial crisis on firm-level determinants of debt-equity choice. </p> </sec> <sec> <title content-type="abstract-heading">Design/methodology/approach</title> <p> – This paper begins by embarking on an extensive review of literature on extant empirical research on capital structure. The panel econometric technique is further adopted to examine firm-level determinants of capital structure and also the impact of 2007/2008 financial crisis. </p> </sec> <sec> <title content-type="abstract-heading">Findings</title> <p> – The findings of the paper suggest that theories of capital structure underpinning debt-equity choice of firms in developed economies are also applicable in the South African context. The authors also find a strong evidence of the effects of the financial crisis on the capital structure of firms in South Africa. </p> </sec> <sec> <title content-type="abstract-heading">Practical implications</title> <p> – This paper serves as springboard on which further research can be grounded and also highlights the interaction between the South African economy and the global economy. </p> </sec> <sec> <title content-type="abstract-heading">Originality/value</title> <p> – The paper provides a fresh evidence on the determinants of capital structure from the Sub-Saharan African context and to the authors' knowledge, this is the first paper that examines the effects of the 2007/2008 financial crisis on capital structure of firms in South Africa.</p> </sec> </abstract>