Capital structure and corporate performance: evidence from Jordan

Authors

Rami Zeitun, University of Qatar, QatarFollow
Gary G. Tian, University of Wollongong, AustraliaFollow

Abstract

This study is to investigate the effect which capital structure has had on corporate performance using a panel data sample representing of 167 Jordanian companies during 1989-2003. Our results showed that a firm’s capital structure had a significantly negative impact on the firm’s performance measures, in both the accounting and market’s measures. We also found that the short-term debt to total assets (STDTA) level has a significantly positive effect on the market performance measure (Tobin’s Q). The Gulf Crisis 1990-1991 was found to have a positive impact on Jordanian corporate performance while the outbreak of Intifadah in the West Bank and Gaza in September 2000 had a negative impact on corporate performance.

Recommended Citation

Zeitun, Rami and Tian, Gary G., Capital structure and corporate performance: evidence from Jordan, Australasian Accounting, Business and Finance Journal, 1(4), 2007, 40-61. doi:10.14453/aabfj.v1i4.3