Northampton Electronic Collection of Theses and Research

Rising corporate debt and value relevance of supply-side factors in South Africa

Machokoto, M., Areneke, G. and Ibrahim, B. (2020) Rising corporate debt and value relevance of supply-side factors in South Africa. Journal of Business Research. 109, pp. 26-37. 0148-2963.

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Machokoto_etal_EL_2019_Rising_Corporate_Debt_in_Emerging_Markets_Value_Relevance_of_Supply_Side_Factors_in_South_Africa.pdf - Accepted Version
Information
Abstract:
Motivated by the recent discovery of a significant increase in corporate debt in developed countries, we use a large sample of 775 listed companies to examine the dynamics and determinants of South African corporate debt. We find an 89% increase in the leverage of the average firm, from 11% in 1990 to 21% in 2015. Long-term and short-term debt increased by 103% and 67%, respectively. We find that this increase is pervasive, and cannot be explained entirely by either firm attributes or macroeconomic factors, despite the importance of the latter. Instead, we find supply-side factors to be the main determinants of the upward trend in corporate debt, highlighting their importance to corporate debt policies in emerging economies.
Creators:
Machokoto, M., Areneke, G. and Ibrahim, B.
Faculties, Divisions and Institutes:
Faculties > Faculty of Business & Law > Accounting & Finance
Date:
1 March 2020
Date Type:
Publication
Page Range:
pp. 26-37
Journal or Publication Title:
Journal of Business Research
Volume:
109
Number of Pages:
12
Language:
English
DOI:
10.1016/j.jbusres.2019.11.039
ISSN:
0148-2963
Status:
Published / Disseminated
Refereed:
Yes
Related URLs:
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