Determinants of choice between equity issuance, equity repurchase and debt issuance of South African companies listed on the Johannesburg Stock Exchange
Journal of Economic and Financial Sciences
| Field | Value | |
| Title | Determinants of choice between equity issuance, equity repurchase and debt issuance of South African companies listed on the Johannesburg Stock Exchange | |
| Creator | Mvita, Mpinda F. Brummer, Leon M. Hall, John H. | |
| Description | Purpose: The introduction of dual decisions (such as the issue of shares and the issue of debt; the repurchase of shares and the repayment of debt; and share issues and share repurchases) has provided an order of preference of financing decisions influenced by company-specific attributes. The aim of this study is to investigate determinants of choice of South African companies listed on the Johannesburg Stock Exchange (JSE) between different financing decisions.Design/methodology/approach: Data were obtained from Integrated Real-time Equity System (IRESS), a reliable supplier of financial data. Data of 90 companies were analysed. A logistic regression model (fixed effect) was used, and multinomial logistic regression (fixed effect) was done using a generalised structural equation model.Findings/results: The research findings highlight the significance of the trade-off theory, the pecking order theory and models based on asymmetric information in elucidating financing decisions in a developing country. The findings extend empirical evidence of determinants of choice between equity issuance, equity repurchase, the no-transaction alternative and debt issuance decisions in South Africa’s emerging economy. The findings also suggest that South African companies listed on the JSE must evaluate company-specific variables and theories that correspond to such variables if they wish to make better financing decisions.Practical implications: The findings will help corporate decision-makers decide between equity issuance, equity repurchase and debt issuance. The findings will also help shareholders make better investment decisions.Originality/value: The article investigates the determinants of choice between four financing decisions and the no-transaction alternatives within the same framework. | |
| Publisher | AOSIS | |
| Date | 2022-09-23 | |
| Identifier | 10.4102/jef.v15i1.778 | |
| Source | Journal of Economic and Financial Sciences; Vol 15, No 1 (2022); 12 pages 2312-2803 1995-7076 | |
| 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://jefjournal.org.za/index.php/jef/article/view/778/1437
https://jefjournal.org.za/index.php/jef/article/view/778/1438
https://jefjournal.org.za/index.php/jef/article/view/778/1439
https://jefjournal.org.za/index.php/jef/article/view/778/1440
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