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Impacts of capital structure: profitability of construction companies in Ethiopia
Journal of Financial Management of Property and Construction Pub Date : 2020-06-29 , DOI: 10.1108/jfmpc-08-2019-0072
Fekadu Agmas W.

Purpose

Capital structure decisions are important decisions for any business activity because they have considerable influence on the worth and cost of companies. Most previous studies in Ethiopia were primarily focused on identifying and measuring problems in banking sectors and other sectors and paying little attention to the construction sector. The purpose of this study is mainly to fill the gap by examining the effects of capital structure on the profitability of construction firms in Ethiopia.

Design/methodology/approach

To test hypotheses of the study, time series secondary data were gathered from the sample of 30 grade one construction companies in Ethiopia during the 2011–2015 period. To examine the correlation among capital structures and its determinants, random effect multiple regression models were used.

Findings

From the regression outcomes, the study indicates that capital structure measured by debt to equity and long-term debt to total assets has a significant positive correlation with return on equity (ROE) and return on assets (ROA) of sampled construction companies. However, the capital structure measured by debt to assets has a significant negative correlation with ROE and ROA of sampled construction companies in Ethiopia.

Originality/value

This paper is the author’s original work and assures that the paper was not undertaken anywhere and is also not published in any journal before.



中文翻译:

资本结构的影响:埃塞俄比亚建筑公司的盈利能力

目的

资本结构决策对于任何业务活动都是重要的决策,因为它们对公司的价值和成本具有相当大的影响。埃塞俄比亚以前的大多数研究主要集中在确定和衡量银行部门和其他部门的问题,而很少关注建筑部门。这项研究的目的主要是通过研究资本结构对埃塞俄比亚建筑公司的盈利能力的影响来填补这一空白。

设计/方法/方法

为了检验研究的假设,在2011-2015年期间,从埃塞俄比亚30家一级建筑公司的样本中收集了时间序列辅助数据。为了检验资本结构及其决定因素之间的相关性,使用了随机效应多元回归模型。

发现

从回归结果来看,研究表明,以债务对所有者权益和长期债务对资产总额的比率衡量的资本结构与样本建筑公司的股本回报率(ROE)和资产回报率(ROA)呈显着正相关。然而,以债务对资产衡量的资本结构与埃塞俄比亚样本建筑公司的ROE和ROA呈显着负相关。

创意/价值

这篇文章是作者的原创作品,并确保该文章没有在任何地方发表,也没有在任何期刊上发表过。

更新日期:2020-06-29
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