Capital structure and corporate performance: evidence from Jordan

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. This article is available in Australasian Accounting, Business and Finance Journal: http://ro.uow.edu.au/aabfj/vol1/iss4/3 The Australasian Accounting Business & Finance Journal, December, 2007. Tian & Zeitun: Capital Structure and Corporate Performance: Evidence from Jordan. Vol. 1, No. 4. Page 40 Capital Structure and Corporate Performance: Evidence from Jordan Rami Zeitun and Gary Gang Tian