Title: Market timing behaviour, bankruptcy costs and capital structure decisions in MENA: the case of Egypt

Authors: Mohamed Sherif

Addresses: School of Management and Languages, Heriot-Watt University, UK; Business School, Cairo University, Cairo, Egypt

Abstract: This paper investigates the determinants of capital structure and in particular the influence of market timing behaviour and bankruptcy costs on leverage decisions in Egypt. Using a panel data model and a range of econometric techniques, it is shown that the effects of market timing on the capital structure of Egyptian listed firms are not consistent over the time. The findings also suggest that bankruptcy cost has a negative impact on leverage ratios and capital structure decisions in the Egyptian companies. In addition, through an analysis of the target capital structure, the paper shows that the Egyptian companies considered here are moving fairly quickly towards their target level of leverage.

Keywords: capital structure; market timing; bankruptcy costs; emerging markets; Egypt; leverage decisions.

DOI: 10.1504/IJAAPE.2015.071586

International Journal of Accounting, Auditing and Performance Evaluation, 2015 Vol.11 No.3/4, pp.338 - 352

Available online: 02 Sep 2015 *

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