Capital structure and public corruption among non-financial firms in the MENA region: The impact of the Arab spring.

Journal article

Abdeljawad, Islam, Hakawati, Ayat A, Abu Alia, Muiz and Rashid, Mamunur 2024. Capital structure and public corruption among non-financial firms in the MENA region: The impact of the Arab spring. Heliyon. 10 (11), p. e32527. https://doi.org/10.1016/j.heliyon.2024.e32527
AuthorsAbdeljawad, Islam, Hakawati, Ayat A, Abu Alia, Muiz and Rashid, Mamunur
AbstractThis study investigated the determinants of financing decisions of firms from the Middle East and North Africa (MENA) region, particularly the effect of public corruption on financing decisions and the effect of disorder following the Arab Spring on public corruption-financing structure relationship. The study encompasses a total of 800 business entities from 14 different countries, spanning the time frame of 2005-2018. Data is analyzed through the application of static fixed effects and dynamic GMM-System models. Results indicate that large, tangible companies prefer debt, whereas profitable companies with more room for growth choose equity. Less corruption is associated with increased corporate debt. The use of debt decreased because of the Arab Spring, and corruption's effect on leverage became weaker. The speed of adjustment to the target leverage is comparatively slow for book leverage, while it is significantly greater for market leverage. These outcomes are consistent with the pecking order behavior resulted from increasing information asymmetry, but the tradeoff theory has some support as well. The implications of this study entail the need for enhancing investor protection, strengthening control measures, increasing transparency, and fostering the overall growth of the financial system to facilitate enterprises' use of debt financing, particularly in the post-Arab Spring era. This paper provides fresh empirical evidence demonstrating the effect of the Arab Spring on capital structure and on the relationship between country corruption and capital structure in the MENA region. The paper also expands the body of research on capital structure and corruption across countries by providing empirical findings from a region that has been relatively overlooked in previous scholarly works. [Abstract copyright: © 2024 The Authors. Published by Elsevier Ltd.]
KeywordsFinancing decisions; Arab spring; Capital structure; MENA region; Corruption
Year2024
JournalHeliyon
Journal citation10 (11), p. e32527
PublisherElsevier
ISSN2405-8440
Digital Object Identifier (DOI)https://doi.org/10.1016/j.heliyon.2024.e32527
https://doi.org/S2405-8440(24)08558-X
Official URLhttps://www.sciencedirect.com/science/article/pii/S240584402408558X
Publication dates
Online06 Jun 2024
Publication process dates
Accepted05 Jun 2024
Deposited17 Jul 2024
Publisher's version
License
File Access Level
Open
Output statusPublished
Permalink -

https://repository.canterbury.ac.uk/item/986q5/capital-structure-and-public-corruption-among-non-financial-firms-in-the-mena-region-the-impact-of-the-arab-spring

Download files

Publisher's version
1-s2.0-S240584402408558X-main.pdf
License: CC BY-NC-ND 4.0
File access level: Open

  • 0
    total views
  • 0
    total downloads
  • 0
    views this month
  • 0
    downloads this month

Export as

Related outputs

Religiosity, financial risk taking, and reward processing: An experimental study
Vanheusden, F., Vadapalli, Sundara Kashyap, Rashid, Mamunur, Griffiths, Mark D. and Kim, Amee 2024. Religiosity, financial risk taking, and reward processing: An experimental study. Journal of gambling studies. https://doi.org/10.1007/s10899-024-10324-4
Small firm auditing using the analytical procedures (APs) in a politically challenging context
Alia, M.A., Abdeljawad, I., Rashid, M. and Frehat, R.A. 2024. Small firm auditing using the analytical procedures (APs) in a politically challenging context. International Journal of Islamic and Middle Eastern Finance and Management. https://doi.org/10.1108/IMEFM-05-2023-0187
A systematic literature review of risks in Islamic banking system: research agenda and future research directions
Sohel, M.N.I., Choudhury, T., Rashid, M. and Hassan, M Kabir 2024. A systematic literature review of risks in Islamic banking system: research agenda and future research directions. Risk Management. 26 (3), pp. 1-29. https://doi.org/10.1057/s41283-023-00135-z
The dynamics of bonds, commodities and bitcoin based on NARDL approach
Bouteska, A., Hassan, M. Kabir, Rashid, M. and Bilgin, Mehmet Hüseyin 2024. The dynamics of bonds, commodities and bitcoin based on NARDL approach. The Quarterly Review of Economics and Finance. 94, pp. 58-70. https://doi.org/10.1016/j.qref.2023.12.013
Direct and indirect influence of national culture on foreign direct investment
Izadi, Selma, Rashid, Mamunur and Izadi, Parviz 2023. Direct and indirect influence of national culture on foreign direct investment. Research in International Business and Finance. 66, p. 102037. https://doi.org/10.1016/j.ribaf.2023.102037
CSR and firm performance nexus in a highly unstable political context: institutional influence and community cohesion
Abdeljawad, I., Rashid, M., Arafat, N.A.R., Naifeh, H. and Ghanem, N. 2023. CSR and firm performance nexus in a highly unstable political context: institutional influence and community cohesion. International Journal of Business Governance and Ethics. https://doi.org/10.1504/IJBGE.2023.10054626
Risk dimensions, risk clusters, and foreign direct investments in developing countries
Emeka, O., Hassan, M., Rashid, M., Prabu, Darniya and Sabit, Ahmed 2022. Risk dimensions, risk clusters, and foreign direct investments in developing countries. International Review of Economics & Finance. 82, pp. 636-649. https://doi.org/10.1016/j.iref.2022.07.013
Introduction to Islamic Fintech: A challenge or an opportunity?
Rabbani, M. R., Hassan, M. K. and Rashid, M. 2022. Introduction to Islamic Fintech: A challenge or an opportunity? in: Hassan, M. K., Rabbani, M. R. and Rashid, M. (ed.) FinTech in Islamic Financial Institutions Scope, Challenges, and Implications in Islamic Finance Cham Palgrave Macmillan. pp. 1-27
Fintech and Islamic financial institutions: Applications and challenges
Abdeljawad, I., Hashem, S, Q. and Rashid, M. 2022. Fintech and Islamic financial institutions: Applications and challenges. in: Hassan, M. K., Rabbani, M. R. and Rashid, M. (ed.) FinTech in Islamic Financial Institutions Scope, Challenges, and Implications in Islamic Finance Cham Palgrave Macmillan. pp. 193-222
Islamic Fintech, blockchain and crowdfunding: Current landscape and path forward
Hassan, M. K., Rabbani, M. R., Rashid, M. and Trinugroho, I. 2022. Islamic Fintech, blockchain and crowdfunding: Current landscape and path forward. in: Hassan, M. K., Rabbani, M. R. and Rashid, M. (ed.) FinTech in Islamic Financial Institutions Scope, Challenges, and Implications in Islamic Finance Cham Palgrave Macmillan. pp. 307-340
COVID-19 challenges and the role of Islamic Fintech
Sitara, K., Rabbani, M. R., Rashid, M. and Anwer, Z. 2022. COVID-19 challenges and the role of Islamic Fintech. in: Hassan, M. K., Rabbani, M. R. and Rashid, M. (ed.) FinTech in Islamic Financial Institutions Scope, Challenges, and Implications in Islamic Finance Cham Palgrave Macmillan. pp. 341-356
Does the regional proximity lead to exchange rate spillover?
Anwer, Z., Hassan, M., Khan, A. and Rashid, M. 2022. Does the regional proximity lead to exchange rate spillover? Journal of International Financial Markets, Institutions and Money. https://doi.org/10.1016/j.intfin.2022.101676
Exploring the driving forces of stock-cryptocurrency comovements during COVID-19 pandemic: an analysis using wavelet coherence and seemingly unrelated regression
Abdul-Rahim, R., Khalid, A., Karim, Z. A. and Rashid, M. 2022. Exploring the driving forces of stock-cryptocurrency comovements during COVID-19 pandemic: an analysis using wavelet coherence and seemingly unrelated regression. Mathematics. 10 (12), p. 2116. https://doi.org/10.3390/math10122116
Voluntary disclosure-cost of equity nexus and the moderating role of corporate governance: evidence from an extremely politically unstable context
Alia, M. A., Abdeljawad, I., Jallad, S. E. and Rashid, M. 2022. Voluntary disclosure-cost of equity nexus and the moderating role of corporate governance: evidence from an extremely politically unstable context. International Journal of Islamic and Middle Eastern Finance and Management. https://doi.org/10.1108/IMEFM-02-2021-0069