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Does capital structure theory remain relevant under abnormal macroeconomic environment: the case of Zimbabwean manufacturing firms during the period 2009-2018

The main objective of this study was to test if the applicability of known capital structure theories holds water in abnormal economic environments, in particular, in Zimbabwe. Using secondary data collected for listed manufacturing firms from 2009-2018, results from a fixed effects regression model concluded that profitability, company size, non-debt tax shields, firm liquidity, inflation and GDP were significant in explaining capital structure decisions in Zimbabwe. In the context of South Africa, company size, asset tangibility, firm liquidity and inflation were found to be significant. The pecking order and trade-off theories were the only two theories that were found to be applicable in the Zimbabwean context, and the application of both theories indicated the use of internally generated funds as opposed to external finance sources, such as debt and equity. These results attribute to the abnormality and instability of the Zimbabwean economy, especially with regards to limited access to capital. / Business Management / M. Com. (Business Management)

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:unisa/oai:uir.unisa.ac.za:10500/27902
Date12 1900
CreatorsMagomo, Norma Tariro
ContributorsNyoka, C.
Source SetsSouth African National ETD Portal
LanguageEnglish
Detected LanguageEnglish
TypeDissertation
Format1 online resource (xi, 114 leaves), application/pdf

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