Title: Debt maturity, financial crisis and corporate performance in GCC countries: a dynamic-GMM approach

Authors: Rami Zeitun; Munshi Masudul Haq

Addresses: Department of Finance and Economics, Qatar University, Doha, Qatar ' Department of Finance and Economics, Qatar University, Doha, Qatar

Abstract: This study investigates the effect of debt financing and debt maturity on corporate performance, using evidence from Gulf Cooperation Council countries (GCC): Qatar, Oman, Kuwait, Kingdom of Saudi Arabia, United Arab Emirates, and Bahrain. The study uses a dynamic GMM approach for an unbalanced sample of 400 firms for the period 2004-2012. The study also investigates the effects of the financial crisis on the significance of long-term and short-term debt financing as determinants of firms' performance. Our findings indicate that the long-term and short-term debt financing affect firms' performance negatively. The results also show that the economic importance of short-term debt increases as a determinant of firms' performance after crisis, while the effect of long-term debt decreases.

Keywords: debt structure; debt maturity; debt financing; firm performance; financial crisis; corporate performance; GCC countries; Gulf Cooperation Council; Qatar; Oman; Kuwait; Saudi Arabia; United Arab Emirates; UAE; Bahrain; dynamic GMM; generalised method of moments.

DOI: 10.1504/AAJFA.2015.070291

Afro-Asian Journal of Finance and Accounting, 2015 Vol.5 No.3, pp.231 - 247

Received: 04 Jul 2014
Accepted: 11 Feb 2015
Published online: 01 Jul 2015 *

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