Financing Policy of Ethiopian Manufacturing Firms

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Abstract

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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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.

Data Availability

Not applicable for this article.

How to Cite This Article

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

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords
Classification
GJMBR-C Classification JEL Code: G32
Version of record

v1.2

Issue date
July 3, 2015

Language
English
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Financing Policy of Ethiopian Manufacturing Firms

Hamdu Mohammed
Hamdu Mohammed Jimma University