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What Drives the Capital Structure of Non-Listed Mauritian Firms?

  • Indranarain Ramlall
Chapter

Abstract

This chapter probes into the capital structure of non-listed non-financial firms in Mauritius. Distinct metrics of leverage are given due consideration, including the use of liabilities, leases, loans and debt. Most importantly, all these distinct metrics of leverage are being assessed in their dual forms – short-term and long-term components, respectively – in order to gain enhanced insight of the capital structure. The findings show that the liquidity and size unleash bearish effects on leverage. While assets tangibility positively impacts on leverage, profitability, non-debt tax shield and growth variables are found to trail behind no impacts. The findings reveal it is feasible that there may be crowding-out effects of loans by leases based on investment inciting the use of loans but deterring that of loans. The potency of the age variable is also noted. Overall, findings advocate a modified pecking order for Mauritian firms in which case short-term leverage precedes long-term leverage.

Keywords

Capital Structure Financial Leverage Inside Ownership Peck Order Theory Asset Tangibility 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© The Author(s) 2017

Authors and Affiliations

  • Indranarain Ramlall
    • 1
  1. 1.University of MauritiusMokaMauritius

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