capital structure in Tanzania

This study examined the moderating impact of audit committee financial expertise on capital structure and performance of listed deposit money banks in Nigeria. Ex-post facto research design was adopted to define the structure and strategy of the study, while the target population was all the listed deposit money banks in Nigeria as at 31st December, 2022 which were 14 in number. Out of the 14 banks 11 were purposively chosen based on their complete annual reports and accounts over the period of the study (2012-2022). Panel regression analysis was adopted to analyze the collected data. Thus, the study found a positive but insignificant impact of debt financing on the performance of the bank. However, equity financing was found to have positive and significant impact on the performance of the selected banks. Furthermore, audit committee financial expertise was found to have positive and significant moderating impact on debt financing, equity financing and net interest margin of the banks. Therefore, the study concluded that audit committee financial expertise has positive and significant moderating impact on capital structure and performance of listed deposit money banks in Nigeria. This signifies that, the higher the number of audit committee members with expertise in finance and accounting, the optimal capital mix decision making of the banks and the higher the performance. Therefore, this study recommends that; in order for listed deposit money banks in Nigeria to have optimal capital structure decision making that would result to higher performance; the composition of audit committee members should reflect high number of members with finance and accounting knowledge.

The Registered Board of Trustees of Young Africans Sports Club Applicant (hereinafter referred to as the applicant) has brought this application against Juma Ally, Geofrey Mwipopo, Fatuma Abeid Amani Karume, Abeid Mohamed Abeid, and Jabir Katundu (hereinafter referred to as 1st, 2nd, 3rd, 4th and 5th respondents) praying that this court be pleased to review and consequently quash its judgment and resultant orders of the decree passed on 02.08.2023 in Civil Case No. 187 of 2022.

In this paper, an attempt has been made to examine the determinants of capital structure-size, business risk, growth rate, earning rate, dividend payout, debt service capacity, and degree of operating leverage-of the companies listed to Nepal Stock Exchange Ltd. as of July 16, 2003. Eight variables multiple regression model has been used to assess the influence of defined explanatory variables on capital structure. In the preliminary analysis, manufacturing companies, commercial banks, insurance companies, and finance companies were included. However, due to the unusual sign problem in the constant term of the model, manufacturing companies were excluded in final analysis. This study shows that size, growth rate and earning rate are statistically significant determinants of capital structure of the listed companies.

In this paper, an attempt has been made to examine the determinants of capital structure-size, business risk, growth rate, earning rate, dividend payout, debt service capacity, and degree of operating leverage-of the companies listed to Nepal Stock Exchange Ltd. as of July 16, 2003. Eight variables multiple regression model has been used to assess the influence of defined explanatory variables on capital structure. In the preliminary analysis, manufacturing companies, commercial banks, insurance companies, and finance companies were included. However, due to the unusual sign problem in the constant term of the model, manufacturing companies were excluded in final analysis. This study shows that size, growth rate and earning rate are statistically significant determinants of capital structure of the listed companies.

Salient Features of the Indian evidence Act, 1872 ○ Indian Evidence Act is Adjective Law because it reflects qualities of IPC and CrPC. ○ It is based on the English Common Law. The Act is based on English Evidence law with few exceptions. ○ It is a special law which defines, consolidates and amends the laws of evidence. ○ The Act came into force on September 1, 1872. ○ It applies to the whole of India. ○ The Act has 167 Sections divided in 3 Parts and 11 Chapters and 1 Schedule. ○ The Act applies to all judicial proceedings in a court including court martials other than courts martial convened under the Army Act, the Naval Discipline Act, the Air force Act. ○ It does not apply on affidavits presented to any Court or Officer and arbitration. ○ The Indian Evidence Act ,1872 applies to both civil and criminal proceedings. ○ The Act deals particularly with the subject of evidence and its admissibility. ○ Evidence excluded by the Act will be inadmissible even if essential to ascertain the truth. ○ The Act stipulates that evidence in a court must be given of facts in issue and relevant facts alone. ○ It is dynamic in nature because it has to change with change in the society and technology. It can be enforced with retrospective effect. ○ It is 'Lex Fori'. Lex Fori means the law of place where the question arises. ○ The Act is not exhaustive. There are many statutes which supplement the Evidence Act (IPC, CrPC and CPC).

Purpose - The purpose of this paper is to examine the macro-economic indicators and firm characteristics that impact the financing decision of the Nepalese enterprises. Methodology - To evaluate the fundamental issues related to firm-specific variables on financing decision of Nepalese enterprises, the study used descriptive, and causal comparative research designs. The study used secondary data from 19 enterprises from 2001 to 2019 listed in NEPSE. Findings - The findings show that liquidity, inflation, profitability, growth opportunity, and gross domestic product are the major indicators for leverage measures. More specifically, it is found that firm size is more statistically significant for total debt financing, suggesting that firms with greater assets or turnover likely to have easier access to borrowing more fund from the capital market. Implication: As the linkage between growth opportunity and short-term debt is significant and negative implies that growth upsurges cost of ...

Capital structure is one of the most important financial decisions in corporate financing strategy. It involves the choice of debt and equity level in financing a company-s operations. This study aims to investigate whether the capital structure choice of Malaysian electrical and electronic manufacturing companies that are listed in the Bursa Malaysia can be explained by factors that have been found by most studies as dominant determinants of capital structure (company size, profitability, asset tangibility, liquidity and growth). Using debt ratio as the proxy for capital structure and applying pooled ordinary least square multiple regression estimation, the results showed that on average, Malaysian electrical and electronic manufacturing companies used less debt in funding their business operations. The findings also showed that size and asset tangibility has a significant positive relationship with debt level, while liquidity has a negative significant relationship with leverage.

The successful completion of this project was due to concerted endeavors and support from quite a number of people to whom my heartfelt appreciation will forever remain. My foremost gratitude goes to the Almighty omnibenevolent Father for having been with me all through my academic journey. Secondly, I would like to recognize and extend my sincere gratefulness to my supervisor Dr.

The study attempts to ascertain the factors influencing buying behavior of Investors in DSE, Tanzania. Tanzania adopted a privatization policy in 1992 after recognizing that the state enterprises were becoming unbearable burden and the government was unable to sustain them. Despite the implementation of the government reforms and the establishment of DSE, Incorporated in the mid-1990s, the Dar-es-salaam Stock Exchange is a relatively new establishment compared to those existing in other parts of Africa. However, it has not been able to reach the masses as much as it should. In the United States of America, for example, the general population uses the stock markets as a means of savings and growing their wealth. In Tanzania, the majority of the population has no indication of what a stock market is and how it could help them. The study suggests that trading shares is the principal business activity for stock exchanges. Whether due to lax standards, poor supervision, weakness in the e...

This study examined the determinants of capital structure of oil and gas companies in Tanzania. Based on two theories-Pecking Order and Trade-Off-the study tested tangibility, firm size, growth, profitability and tax shield. To test these variables, secondary data of eight oil and gas firms operating from 2008 to 2014 was used. Using multiple regression analysis, the study found that the effect of the independent variables on leverage differs with the level of operations. When all firms are considered, the size of the firm, profitability, tax effect and growth rate tend to be negatively but insignificantly related with the capital structure. Tangibility has an insignificant positive relationship with capital structure. When considering only firms that are at the selling level, profitability, tangibility and growth variables significantly but negatively relate with capital structure. Tax significantly affects the capital structure positively while size has no effect. The study contributes to the Pecking Order Theory that firms tend to use for internally generated funds before using external sources. It challenges the Trade-Off Theory which suggests that there is a positive relationship between tangible assets and leverage. Practically, the study suggests that determining factors differ along the project life cycle. Their effect on the capital structure may not be significant at the initial and developmental stage but significant during the selling and growth stages.

Leverage helps to understand how much debt and equity employed by a firm to funds its operation and asset. Modigliani and Miller are the path breaker in this sector. In 1958 identified irrelevancy proposition of Firm Leverage decision. In 1963 they came with their new explanation to incorporate the effect of tax. There are some other popular theories. Jensen and Meckling agency cost theory, Scott trade off theory, Ross signaling theory, Myers and Majluf pecking order theory are the most popular one. There are several determinants in Firm Leverage used in different studies. In this study, we used some most popular determinants. They are profitability, tangibility, growth, operating leverage, liquidity, size. In this study, nine DSE listed food and allied companies’ data are used to analysis the relation between determinants and leverage and Firm Leverage theories are also tested for those companies. Food and allied sector is a constant growing sector and good option for the investors...

The empirical study was focused predominantly on validity tests of the three theories on capital structures, the static trade-off theory, the pecking order theory (information asymmetry theory), and agency cost theory in the Tanzanian context. The study used secondary data from eight of the non-financial companies listed in Dar Es Salaam Stock Exchange (DSE) from 2006-2012. The study used descriptive (quantitative) approach to test the practicality of the theories in Tanzania. The multiple regressions model used to test the theoretical relationship between the financial leverage and characteristics of the company. The research found that there is no strong evidence for validation of static trade off theory, little support of pecking order theory, but the agency cost theory is confirmed to be valid and practiced in Tanzania. It recommended that Tanzanian companies should be adhering to the determinants of the capital structure in the Tanzanian context found by this study.

The empirical study was focused predominantly on validity tests of the three theories on capital structures, the static trade-off theory, the pecking order theory (information asymmetry theory), and agency cost theory in the Tanzanian context. The study used secondary data from eight of the non-financial companies listed in Dar Es Salaam Stock Exchange (DSE) from 2006-2012. The study used descriptive (quantitative) approach to test the practicality of the theories in Tanzania. The multiple regressions model used to test the theoretical relationship between the financial leverage and characteristics of the company. The research found that there is no strong evidence for validation of static trade off theory, little support of pecking order theory, but the agency cost theory is confirmed to be valid and practiced in Tanzania. It recommended that Tanzanian companies should be adhering to the determinants of the capital structure in the Tanzanian context found by this study.

This paper develops a corporate ownership identity-based to investigate the financial decision of Malaysian firms. Specifically, this study investigates whether the financial strategy of family, managerial-owned, foreign, and government firms tend to adopt the assumptions of the trade-off or pecking order theories. Panel data analysis is conducted on a sample of 407 firms for the period of 2012 to 2015. In general, the results provide evidence for both theories. The trade-off theory seems to be more obvious in firms dominated by family and managers. On the other hand,pecking order theory is more pronounced in government and foreign firms. The current paper argues that the information asymmetry is lower in managerial-owned and family firms compared to government and foreign firms because of their direct engagement in the management. In addition, the higher information asymmetry in government and foreign firms slows the speed of adjustment to the target capital structure.

This paper empirically investigates how the degree of debt specialization varies because of profitability levels, affecting the organizational determinants and debt structure choices. Using a novel data of 419 firms from 2009 to 2015, we find a significant difference in the usage of debt types between the profitability sub-groups. Low profitable businesses incline more towards debt specialization than high profitable firms. However, short-term debts remain a prevalent source of borrowing regardless of profitability level for Pakistani companies. Our evidence also suggests that among the low profitability subsample, larger, riskier, growing companies with high expense ratios are more likely to be involved in the higher degrees of debt specialization, as compared to highly profitable businesses. Consistently, the preeminent reasons for debt specialization are information asymmetry, expected default risk, good reputation and accessibility to the debt market. 

In the world of corporate finance, financial structure decision of firms remains one of the most critical. Previous empirical studies have identified factors like size, asset structure, tangibility, profitability, risk, growth and market-to-book ratio all of which have been exhausted in literature as determinants of financial structure of firms. However, research on verifying the existence of these factors in small size firms has been minimal. This study presents a sample of SMEs in Nigeria which serves as a pilot survey for the test of the existence and strength of the identified determinant factors of financial structure. A panel data of ten firms for five years was analyzed using the pooled OLS. The result reveals profitability and size as the only determinant factor for firms under study. This shows a deviation from other studies on small firms in developing economies, the reason which may be country specific. The study provides a starting point for a more inclusive and comprehensive study on financial structure decisions of SMEs in Nigeria.

Bradford University School of Management Emm Lane Bradford BD9 4JL Email: [email protected] *Corresponding Author Abstract Purpose-This study examines the factors that determine the choice of multiple accounting methods in Tanzania. The study investigates managers' decisions to choose accounting methods in a positive accounting theory perspective using 60 year panel data on 15 companies listed on the Dar es Salaam Stock Exchange. Design/Methodology/Approach-Data were extracted from the companies' annual reports. Possible determinants of the choice of accounting methods are identified based on the positive accounting theory, including firm size, leverage, internal financing, proportion of non executive directors, ownership dilution and labour force Intensity. The study then utilizes multiple regression analysis to determine the significant factors influencing the manager's choice of accounting methods. Findings-The results show that the significant factors are company size, internal financing, proportion of non executive directors and labour force. Contrary to the outcome of prior studies, we found that company size and internal financing are positively related with income strategy. The study proves statistically that there is a strong association between choice of accounting methods and income strategy. Original Value-This study makes several contributions to the body of knowledge. First, in the Tanzanian context, it determines the factors which affect choice of accounting methods. Second, the study identifies proportion of non executive directors as a new factor impinging on the choice of accounting policies. Finally, this study shows for the first time that the use of RATIO of income increasing accounting policies to total number of accounting policies can be used as dependent variable. Purpose-This study aims to examine the factors that determine the choice of multiple accounting methods in Tanzania. The study investigates managers' decisions to choose accounting methods in a positive accounting theory perspective using panel data covering 60 years from 15 companies listed on the Dar es Salaam Stock Exchange.

The empirical study was focused predominantly on validity tests of the three theories on capital structures, the static trade-off theory, the pecking order theory (information asymmetry theory), and agency cost theory in the Tanzanian context. The study used secondary data from eight of the non-financial companies listed in Dar Es Salaam Stock Exchange (DSE) from 2006-2012. The study used descriptive (quantitative) approach to test the practicality of the theories in Tanzania. The multiple regressions model used to test the theoretical relationship between the financial leverage and characteristics of the company. The research found that there is no strong evidence for validation of static trade off theory, little support of pecking order theory, but the agency cost theory is confirmed to be valid and practiced in Tanzania. It recommended that Tanzanian companies should be adhering to the determinants of the capital structure in the Tanzanian context found by this study.

The research based on determining the determinants of the capital structure decisions in Tanzanian context. A researcher found out on how Tanzanian non-financial listed companies’ characteristics relate to their financial leverages and on how choose and adjust their strategic financing mix. The empirical research was focused predominantly on validity tests of the three theories on capital structures, the static trade-off theory, the pecking order theory (information asymmetry theory), and agency cost theory. The research was involved eight of the non-financial companies listed in Dar es Salaam Stock Exchange (DSE) by 10.10.2010.

The determinants of capital structure were assessed through the dependent variable that is financial leverage, which is the ratio of total debt to total assets. The total debt includes both short and long-term interest bearing debt. Moreover, the independent variables (company’s characteristics) include company size, profitability, growth rate, liquidity, assets tangibility and dividend payout.

The research based on secondary data. The main source of data was the Dar es Salaam Stock Exchange (DSE). The population of the research was all Tanzanian non-financial companies listed at DSE. The financial statements were extracted to obtain the relevant information. The websites of all Tanzanian non-financial companies sampled were visited and available financial statements were downloaded from them. The multiple regressions model was used to test the theoretical relationship between the financial leverage and characteristics of the company. The MINITAB 15 English Computer Software was used to run the regression model. The research found that the profitability and assets tangibility  are the two key determinants of the capital structure decisions in Tanzania. Company size and liquidity are suggestive determinants. It is recommended that, Tanzanian companies should make decisions on their capital structure by considering the influence of their individual characteristics in order to configure an optimal capital structure with no heavy burden of debts or high costs of paying shareholders, and internal financing should be preferred to others but with care of saving the shareholders’ interest.