A proposed Model for small and medium-sized enterprises Capital Structure Decisions in developing Countries "Evidence from Egypt"
El Maghawry Ibrahim, Marwa
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The Purpose of this thesis is to contribute to the limited research of determining the factors that affect the capital structure decisions of the Egyptian small and medium enterprises. Although the traditional theories of capital structure are useful in explaining the capital structure decisions of the companies, but it is showed that they mainly explained these decisions of large enterprises in developed economies, so the researcher tries to specify the main determinants of capital structure of SMEs in the Egyptian context. The study has been performed by investigating the capital structure of a sample of 27 SMEs that are listed in the NileX index, the only index for the Egyptian SMEs. The data was collected over the period 2010 – 2016. The results showed evidence that some of managerial attitudes and characteristics are considered from the drivers of the capital structure decisions of the Egyptian SMEs. Aversion to external control has a negative impact on the willingness to seek external financing while managerial growth intentions and strength of the managerial relationships with others positively affect the leverage. Also, the results showed a limited evidence on the effect of corporate governance mechanisms on the capital structure, CEO duality positively affect the leverage. Firm specific factors and country specific factors are considered from the determinants of the capital structure decisions of the Egyptian SMEs.