This paper investigates the relevance of market timing considerations on the debt-equity choice using a panel of tunisian and french listed firms. Consistent with the market timing theory, we find that firms tend to issue equity when their market valuations are relatively higher than their book values and after market performance improvement. As a consequence, these firms become underlevraged in the short-term and this impact of equity market timing on capital structure persists beyond eight years.

This research tests the efficiency of the ownership structure and the debt policy as mechanism of resolution of agency conflicts between shareholders and managers due to the problem of overinvestment, in the limitation of the problem of the free cash flow, by estimating three stage least square simultaneous model and on the basis of a sample of 35 non-financial Tunisian listed companies selected for the period 1999–2008. Our results are in favour of the theory of free cash flows of Jensen (1986) that stipulates that the debt policy represents the principal governance mechanism that can limit the risk of free cash flow. However, the ownership concentration and managerial ownership increase the risk of the free cash flow.

Since 1970, the debate on the relationship between taxation and corporate financial performance has intensified during these last decades. The aim of this paper is to examine this relationship thesis. If it is acknowledged that incentives become a widespread method in the world in order to promote the investment, the paper contribute to the literature by testing the effects of an inciting taxation on the profitability of the Tunisian exporting firms in the sector of the Mechanical and Electric Engineering Industries. The empirical study, conducted on a sample of 60 firms, reports the following results: the estimation of the benefit and the output conclude that an increase of taxation affects negatively these two financial criteria of the performance. In addition to the use of temporal data, an approach based on an investigation by questionnaire confirms the results found at the time of the other approaches.

This research tests the efficiency of the debt policy, dividend policy and ownership structure as mechanism of resolution of agency conflicts between shareholders and managers due to the problem of overinvestment, in the limitation of the problem of the free cash flow. By estimating three stage least square simultaneous model and on the basis of a sample of 35 non-financial Tunisian listed companies selected for the period 2000-2009, our results are in favor of the theory of free cash flows of Jensen (1986) that stipulates that the debt policy represents the principal governance mechanism that can limit the risk of free cash flow. However, our empirical results do not confirm our hypothesis implies that the solution to reduce the level of free cash flow in the Tunisian firms with low growth opportunities is the use of policy dividends. It therefore appears that in the case of our sample, managers must settle their debts to creditors. They should thus allocate free cash flow to profitable projects. Thus, the debt reduces agency costs of free cash flow and present as a control mechanism which substitute dividend policy. Also, it is found that managerial ownership lowers the level of agency costs of free cash flow. However, the ownership concentration increases the risk of the free cash flow. Finally, regarding the impact of ownership structure on the payout ratio, our results support the idea that more risk aversion of the majority shareholders and their intention to expropriate minority shareholders through the extraction private benefits are the cause of a low dividend.

The agency relationship between managers and shareholders has the potential to influence decision-making in the firm which in turn potentially impacts on firm characteristics such as leverage. Prior evidence has demonstrated an association between ownership structure and firm value. This paper extends the literature by examining a further link between ownership structure and capital structure. Based on a system of simultaneous equations on the basis of a panel of Tunisian companies listed on the Tunisian stock exchange during the period 2000-2009, our results show that the ownership structure affects the capital structure and vice versa. In addition, the relationship between debt and managerial ownership is nonlinear.Keywords: Corporate governance, debt policy, ownership structure, free cash flow.