Examination of factors influencing capital structure decision : evidence from Syria

الملخص EN

The study aims to explore the determinants of capital structure of Syrian joint stock companies, and to test whether the determinants offered by financial theory and previous studies are able to provide convincing explanations for companies in Syria.

A total of 33 joint stock companies that subject to the supervision of Syrian Commission on Financial Markets and Securities were selected from year 2007 to 2011 (the period before the circumstances of Syrian crisis).

This study applied eight determinants as independent variables: profitability, liquidity, business risk (volatility), growth prospects, tangibility, size, age, and taxes.

On the other hand, the leverage ratio represented the variable related to the firm’s capital structure.

To achieve the objective of the study, the researcher used a hypothetical-deductive approach to formulate the hypotheses, then in order to test these hypothesis, the researcher used panel data, which is a combination of data time series and cross section.

The results found that there is a significant positive relationship between capital structure and the variables of profitability and size.

Also, there is a significant negative relationship between capital structure and the variables of volatility; liquidity; and tangibility.

While, there is no relationship with firm's age; expected growth; and taxes.