Firm’s Capital Structure Determinants and Financing Choice by Industry in Morocco

Abstract

The paper employs Panel regression approach to investigate capital structure impact on firm’s performance in Morocco, Based on the result of Haussmann test, fixed effect fit the first model better; thus it was utilized to examine the capital structure determinants in Morocco firms. The annual data was collected from Moroccan authority of capital market and Casablanca stock exchange official website; it covers a period of eight years from 2009 to 2016 of 52 Moroccan companies. The results of this research conclude that out of seven variables there are four more significant ones, which are: return on asset, asset tangibility, size and liquidity, all of them have a negative impact, except for size is positively significant. Therefore, the main determinants of capital structure are firms’ specifics factors in Morocco and the choice of leverage is different from industry to another according to the specifics of its activity.