A cross sectional study of the capital structures of firms listed on the JSE

 

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dc.contributor.advisor Alhassan, Abdul Latif en_ZA
dc.contributor.author McGregor, Henry Roystan en_ZA
dc.date.accessioned 2018-11-23T06:58:48Z
dc.date.available 2018-11-23T06:58:48Z
dc.date.issued 2017 en_ZA
dc.identifier.citation McGregor, H. 2017. A cross sectional study of the capital structures of firms listed on the JSE. University of Cape Town. en_ZA
dc.identifier.uri http://hdl.handle.net/11427/29088
dc.description.abstract This study examines the capital structures' differences across industry classification for 221 firms listed on the Johannesburg Stock Echange, from 2007 to 2016. A panel multiple regression model which takes into account the determinants of capital structure was used to identify the effect of firm level characteristics on the capital structure across the industrial sectors. The findings indicate that firms in the health care services, utilities and industrial sectors employ a higher percentage of leverage in the mix of capital, compared to the others. From the panel regression analysis, asset tangibility, profitability and firm size were found to have a significant effect on total debt, with varying effects observed for long-term and short-term debt. On the industrial determinants of capital structure, firms in the basic material industry, total debt ratio is mainly determined by the fixed-asset ratio, indicating that firms in this sector rely on tangibility of assets to secure debt financing. Profitability has a negative relationship with total debt, indicating possibly the presence of the pecking order theory. The consumer goods and consumer service industry firms' leverage ratios are mainly determined by the firms' profitability. The health care industry shows signs of the Trade-off Theory being present as the main determinant, being the effective tax rate which has an inverse relationship with the total debt ratio. The industrial industry has an inverse relationship with profitability, also indicating a possible pecking order theory at play. The main determinants for the technology industry are asset tangibility, profit and the effective tax rate. The telecommunication industry determinant of total debt is profit. en_ZA
dc.language.iso eng en_ZA
dc.subject.other Development Finance en_ZA
dc.title A cross sectional study of the capital structures of firms listed on the JSE en_ZA
dc.type Master Thesis
uct.type.publication Research en_ZA
uct.type.resource Thesis en_ZA
dc.publisher.institution University of Cape Town
dc.publisher.faculty Faculty of Commerce en_ZA
dc.publisher.department Research of GSB en_ZA
dc.type.qualificationlevel Masters
dc.type.qualificationname MCom en_ZA
uct.type.filetype Text
uct.type.filetype Image
dc.identifier.apacitation McGregor, H. R. (2017). <i>A cross sectional study of the capital structures of firms listed on the JSE</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,Research of GSB. Retrieved from http://hdl.handle.net/11427/29088 en_ZA
dc.identifier.chicagocitation McGregor, Henry Roystan. <i>"A cross sectional study of the capital structures of firms listed on the JSE."</i> Thesis., University of Cape Town ,Faculty of Commerce ,Research of GSB, 2017. http://hdl.handle.net/11427/29088 en_ZA
dc.identifier.vancouvercitation McGregor HR. A cross sectional study of the capital structures of firms listed on the JSE. [Thesis]. University of Cape Town ,Faculty of Commerce ,Research of GSB, 2017 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/29088 en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - McGregor, Henry Roystan AB - This study examines the capital structures' differences across industry classification for 221 firms listed on the Johannesburg Stock Echange, from 2007 to 2016. A panel multiple regression model which takes into account the determinants of capital structure was used to identify the effect of firm level characteristics on the capital structure across the industrial sectors. The findings indicate that firms in the health care services, utilities and industrial sectors employ a higher percentage of leverage in the mix of capital, compared to the others. From the panel regression analysis, asset tangibility, profitability and firm size were found to have a significant effect on total debt, with varying effects observed for long-term and short-term debt. On the industrial determinants of capital structure, firms in the basic material industry, total debt ratio is mainly determined by the fixed-asset ratio, indicating that firms in this sector rely on tangibility of assets to secure debt financing. Profitability has a negative relationship with total debt, indicating possibly the presence of the pecking order theory. The consumer goods and consumer service industry firms' leverage ratios are mainly determined by the firms' profitability. The health care industry shows signs of the Trade-off Theory being present as the main determinant, being the effective tax rate which has an inverse relationship with the total debt ratio. The industrial industry has an inverse relationship with profitability, also indicating a possible pecking order theory at play. The main determinants for the technology industry are asset tangibility, profit and the effective tax rate. The telecommunication industry determinant of total debt is profit. DA - 2017 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 2017 T1 - A cross sectional study of the capital structures of firms listed on the JSE TI - A cross sectional study of the capital structures of firms listed on the JSE UR - http://hdl.handle.net/11427/29088 ER - en_ZA


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