Abstract

This study is to investigate the effect which capital structure has had on corporate performance using a panel data sample representing of 167 Jordanian companies during 1989-2003. Our results showed that a firm’s capital structure had a significantly negative impact on the firm’s performance measures, in both the accounting and market’s measures. We also found that the short-term debt to total assets (STDTA) level has a significantly positive effect on the market performance measure (Tobin’s Q). The Gulf Crisis 1990-1991 was found to have a positive impact on Jordanian corporate performance while the outbreak of Intifadah in the West Bank and Gaza in September 2000 had a negative impact on corporate performance.

Keywords: corporate performance, corporate failure, capital structure, Jordan, STDTA

How to Cite:

Zeitun, R. & Tian, G. G., (2007) “Capital structure and corporate performance: evidence from Jordan”, Australasian Accounting, Business and Finance Journal 1(4), 40-61. doi: https://doi.org/10.14453/aabfj.v1i4.3