Firm age, collateral value, and access to debt financing in an emerging economy: evidence from South Africa
South African Journal of Economic and Management Sciences
| Field | Value | |
| Title | Firm age, collateral value, and access to debt financing in an emerging economy: evidence from South Africa | |
| Creator | Ezeoha, Abel Botha, Ferdi | |
| Description | This paper applies the Blundell and Bond system generalised method of moments (GMM) two-step estimator to examine the impact of age and collateral value on debt financing, using a panel of 177 non-financial companies listed on the Johannesburg Stock Exchange over the period 1999 to 2009. The results show that South African firms have target leverage ratios and adjust their capital structures from time to time to achieve their respective targets, that the relationship between firm age and debt financing is non-monotonic, and that firms with higher collateral value are likely to face fewer constraints on borrowing and therefore have greater access to medium-term and long-term debts. Robustness tests also reveal that during start-up and maturity stages, a firms access to debt markets is significantly influenced by investments in assets that are acceptable to external creditors as collateral. These findings suggest that debt financing policies could be more critical for firms in the start-up and maturity stages. | |
| Publisher | AOSIS Publishing | |
| Date | 2012-03-16 | |
| Identifier | 10.4102/sajems.v15i1.138 | |
| Source | South African Journal of Economic and Management Sciences; Vol 15, No 1 (2012); 72-93 2222-3436 1015-8812 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://sajems.org/index.php/sajems/article/view/138/140
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