The extent of debt financing within state-owned corporations in Kenya

Nyamita, Micah Odhiambo; Garbharran, Hari Lall; Dorasamy, Nirmala

doi:10.22495/cocv12i4csp10

COC

2015

DOI: 10.22495/cocv12i4csp10

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The extent of debt financing within state-owned corporations in Kenya

Micah Odhiambo Nyamita¹,

Hari Lall Garbharran²,

Nirmala Dorasamy³

Abstract: The public sector reforms’ programme in Kenya, has witnessed five state-owned corporations being privatised, and several more, from hotels to banks, have been scheduled to be privatised. However, many of Kenya’s state-owned corporations are in considerable debt, which reduce their value in the process of privatisation. This study attempted to determine the extent and the theory suitable for explaining debt-financing within the state-owned corporations in Kenya from 2007 to 2011. The study applied both descript… Show more

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Cited by 2 publications

References 18 publications

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Influence of Income Taxation on Indebtedness of Non-financial Firms

Klazar¹,

Slintáková²

2019

Politicka ekonomie

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Influence of Income Taxation on Indebtedness of Non-financial FirmsTheory supposes that corporate income taxation encourages companies to issue debt as opposed to equity finance because interests are deductible while dividends are not. In addition, international differences in tax regimes incentivize multinational firms to shift debt to optimize their taxes. Since a high debt level can have adverse consequences, we decided to find out whether taxation is one of the causes of indebtedness of the non-financial corporate sector. We used a macroeconomic approach, i.e., all the variables were constructed at the country level, and employed data for 17 EU member states for the period 2006-2014. The model for short-term indebtedness suggests that there is a relationship between corporate debt and taxation, especially between the debt-shifting incentive and the thin capitalization rule. However, the model for total indebtedness does not provide any evidence that corporate taxation influences the non-financial corporate sector debt. The firms' debt was affected rather by macroeconomic factors.

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Influence of Income Taxation on Indebtedness of Non-financial Firms

Klazar¹,

Slintáková²

2019

Politicka ekonomie

View full text Add to dashboard Cite

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Measurement Matters A Meta-Study of the Determinants of Corporate Capital Structure

Hang

Rathgeber

Stöckl³

2017

SSRN Journal

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This study aggregates the mixed empirical evidence of the seven most commonly investigated determinants of corporate capital structure. We apply meta-regression analysis on a data set of 3,890 reported results, manually collected from 100 primary studies covering firm observations from 57 countries over the past 65 years. Our results reveal thatin descending order of importancetangible assets (positive sign), market-to-book ratio (negative sign), and profitability (negative sign) are significant determinants of corporate debt level. In addition, we identify the presence of publication selection bias in academic literature. Accordingly, specific results are systematically overrepresented, as authors prefer reporting statistically significant estimates in line with theory or corresponding to previous empirical research. Significant determinants as well as publication selection bias are more pronounced for characteristics like market-based measures of capital structure or total debt measures of capital structure or for top articles from highly renowned journals, as compared to book-based measures of capital structure or long-term debt measures of capital structure or randomly selected articles including more unknown and unpublished studies. Overall, these findings highlight the need to relativize existing statistically significant results in this field and instead provide independent analyses in future for scientific progress.

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The extent of debt financing within state-owned corporations in Kenya

Cited by 2 publications

References 18 publications

Influence of Income Taxation on Indebtedness of Non-financial Firms

Influence of Income Taxation on Indebtedness of Non-financial Firms

Measurement Matters A Meta-Study of the Determinants of Corporate Capital Structure

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