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Panel data analysis reveals that off-balance sheet engagements significantly increase debt ratios in companies, highlighting financial transparency concerns.
Abstract This study investigates the impact of off-balance sheet commitments on the debt ratio of companies listed on the Tunisian Stock Exchange (BVMT) within the context of an uncertain economic climate and evolving credit practices.Recognizing that these unrecorded obligations can significantly influence a firm's future financial standing and risk profile, the research aims to determine the effect of off-balance sheet engagements (ENGAG) on the total debt to total assets ratio (TDA). Employing panel data analysis on 38 companies from 2019 to 2024 and utilizing Generalized Linear Models (GLM) and Ordinary Least Squares (OLS) regression,Our questions are :What is the impact of off-balance sheet commitments on the debt ratio? And how can we know the impact of other factors on the debt ratio?The findings reveal a significant positive relationship between off-balance sheet engagements and the debt ratio. This suggests that increased reliance on these financing tools is associated with higher leverage, underscoring the importance of considering financial transparency and potential hidden risks when evaluating a company's financial health.
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amira berrahal (2025) studied this question.
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