OWNERSHIP STRUCTURE AND CAPITAL STRUCTURE: EVIDENCE FROM THE JORDANIAN CAPITAL MARKET (1995-2003)

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Ghassan Omet ORCID logo

https://doi.org/10.22495/cocv3i4p8

Abstract

The capital structure choice has generated a lot of interest in the corporate finance literature. This interest is due to several reasons including the fact that the mix of funds (leverage ratio) affects the cost and availability of capital and thus, firms’ investment decisions. To date, much of the empirical research has been applied on companies listed on advanced stock markets. This literature considered a variety of factors such as company size, profitability, asset tangibility, firm growth prospects and ownership structure as possible determinants of the capital structure choice. This paper examines the finances of Jordanian listed companies and the impact of their ownership structure on the capital structure choice. Based on a panel data methodology (1995-2003), the results indicate that while Jordanian companies are not highly leveraged, their ownership structure does have a significant impact on capital structure, and that much of the main-stream determinants of capital structure are applicable to the Jordanian scene.

Keywords: Jordanian Capital Market, Ownership Structure, Capital Structure, Panel Data

How to cite this paper: Omet, G. (2006). Ownership structure and capital structure: Evidence from the Jordanian capital market (1995-2003). Corporate Ownership & Control, 3(4), 99-107. https://doi.org/10.22495/cocv3i4p8