文章基本信息

标题：Determinants of debt financing in South African state-owned entities
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作者：Ferina Marimuthu
期刊名称：Accounting and Financial Control
印刷版ISSN：2543-5485
电子版ISSN：2544-1450
出版年度：2021
卷号：3
期号：1
页码：40-52
DOI：10.21511/afc.03(1).2020.04
语种：English
出版社：LLC “Consulting Publishing Company “Business Perspectives”
摘要：Using debt to finance investments is a common feature in the balance sheets of state-owned entities (SOEs). The greater the degree of financial leverage, the higher the proportion of debt resulting in greater interest payments that negatively affect the earnings attributable to shareholders. This paper considers the determinants of debt financing in light of the debt crisis that the South African economy faces and, more so, the public sector and its validity under capital structure theories. The data set was analyzed for the financial period from 1995 to 2020 of thirty-three commercial SOEs in South Africa. Multiple regression models were tested using the Generalized Method of Moments estimator. The results highlighted that significant variables affecting state-owned entities’ debt levels are profitability, age, growth opportunities, liquidity, probability of bankruptcy, and non-debt tax shield. The policy recommendations are that the government prioritizes reducing debt levels for South Africa to develop and achieve sustainable development. The changes in firm-specific factors that affect the optimal capital structure and the entity’s value must be considered.