This study examined the capital structure of listed industrial companies on Amman Stock Exchange (ASE) over the period (2001-2005). The findings of this study contribute towards a better understanding of financing behaviour in Jordanian industrial companies. Hypotheses, based on comparing the relationships between Leverage ratio (Lev 1), LTD/TD (Long-term debts/total debts) and five explanatory variables that represent size, tangibility, profitability, long-term debt and short-term debt. To test those relationships regression analysis for Leverage ratio (Lev 1) and TD LTD model was used to explain determinants of the capital structure of Jordanian industrial companies on the time period (2001- 2005). There was a significant positive relationship between leverage ratio (Lev 1) and size (TA), Tangibility (Tang), long-term debt (LTD) and short-term debt (STD) and there was a significant negative relationship between leverage ratio and Profitability of the firm. In other words, the results of this study showed that a significant positive relationship between LTD/TD and size (TA), Tangibility (Tang), and long-term debt (LTD) and there was a negative relationship between LTD/TD and short-term debt of the firm. Also, the results showed that Total assets, Tangibility, Long-term debt, had a positive correlation with LTD/TD. While, short-term debt had a negative correlation with LTD/TD.
No takes yet. Share an insight, caveat, or question.
Husni Ali Khrawish (2010) studied this question.