Liquidity of the financial market and the financing decision. what relation? : case of Kuwaiti financial market(2011-2018)‎

Abstract EN

This study aims to measure the relationship between liquidity of the financial market and the financing decisions in the industrial companies by econometric method, throughout applying the study on twenty four companies listed in the Kuwait financial market from the period 2011 to 2018 Using the panel data and stata 16, the study model includes three models fundamental depending on the types of the financing decision, which is represented in ordinary shares financing, long term loans financing and retained earning financing.

the study have found that the level of liquidity of the Kuwait financial market play the mainly role in choose the financing decisions of the listed industrial enterprises, where the higher the liquidity of the Kuwait financial market leads the enterprises to finance through ownership(47, 82).

However, if the liquidity of the Kuwait financial market decreases, it leads the enterprises to finance through long-term loans(27, 48) and retained earnings(21, 43).

JEL Classification: D21, G1, G14, G30