Financing Policy of Ethiopian Manufacturing Firms

1
Hamdu Kedir Mohammed
Hamdu Kedir Mohammed
2
Sabir Fayso Abdullahi
Sabir Fayso Abdullahi
3
Yonas Mekonnen Wetere
Yonas Mekonnen Wetere
1 Jimma University

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GJMBR Volume 15 Issue C5

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The aim of this study is to explore factors that affect the capital structure of manufacturing firms with the absence of secondary market and to investigate whether the capital structure models derived from Western settings provide some convincing explanation for capital structure decisions of Ethiopian firms. Theories of capital structure are reviewed in order to formulate testable factors concerning the determinants of capital structure of the manufacturing firms. The investigation is performed using panel data procedures for a sample of 32 firms during 2006-2010 G.C. Profitability as measured by return on asset, tangibility and the business risk level of firm are found to be significant determinant factors of capital structure.

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

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Not applicable for this article.

Hamdu Kedir Mohammed. 2015. \u201cFinancing Policy of Ethiopian Manufacturing Firms\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 15 (GJMBR Volume 15 Issue C5): .

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GJMBR Volume 15 Issue C5
Pg. 21- 32
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-C Classification: JEL Code: G32
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v1.2

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July 3, 2015

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English

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The aim of this study is to explore factors that affect the capital structure of manufacturing firms with the absence of secondary market and to investigate whether the capital structure models derived from Western settings provide some convincing explanation for capital structure decisions of Ethiopian firms. Theories of capital structure are reviewed in order to formulate testable factors concerning the determinants of capital structure of the manufacturing firms. The investigation is performed using panel data procedures for a sample of 32 firms during 2006-2010 G.C. Profitability as measured by return on asset, tangibility and the business risk level of firm are found to be significant determinant factors of capital structure.

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Financing Policy of Ethiopian Manufacturing Firms

Hamdu Kedir Mohammed
Hamdu Kedir Mohammed Jimma University
Sabir Fayso Abdullahi
Sabir Fayso Abdullahi
Yonas Mekonnen Wetere
Yonas Mekonnen Wetere

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