The Determinants of the Financial Structure of Mauritanian Public Enterprises

Publiques Mauritaniennes

Abstract

Financial theory proves that some companies prefer to finance themselves only through equity, while others favor a mixed structure consisting of equity and debts. The choice of  a financial structure is made in consideration of several factors. The objective of this article an attempt to empirically determine the factors . which lead Mauritanian public companies to prefer a financial structure.  Our research focusses on a data corpus from thirty one Mauritanian public companies, which filed their financial statements with the DTF (Directorate of Financial Supervision) for the period from 2017 to 2019, Hence the use of the random effect static panel data method of 93 ,observations owning to the given of the heterogeneity at the data level.

The results obtained from the model estimation of the random effects panel data show that three of the five variables examined can be considered as major determinants of the financial structure of the companies involved in this study. They include, the size and liquidity variables are negatively and significantly correlated with the total indebtedness of these companies. On the other hand, the age of the enterprise variable is positively and significantly

linked with endebtedness.  As the effect of these two variables proved negative, thus confirming TOT  predictions. company age is accounted by the „POT‟. This implies that even though the relative importance of the „TOT‟ is underscored, theoretical frameworks of reference complement one another, which accounts for the choice of the financial structure of the companies studied.                

Jel Classification Codes : L32 ; G39 ; C33

Paper type : Empirical research