Capital Structure and Macroeconomic Determinants in Emerging Country: A Panel Quantile Regression Approach

Abstract

Financing decisions of firms have been a topic interest for financial economists for a long time. In this study, we aim to contribute to this area by examining the impact of macroeconomic determinants on capital structure in emerging markets. Utilizing the panel quantile regression method (QREG) and analyzing data from listed Tunisian firms between 2011 and 2021, this paper investigates the relationship between macroeconomic determinants and capital structure across different quantiles. The research findings suggest that both firm size and growth options are positively correlated with leverage. Additionally, this paper finds that return on assets has a negative and significant effect at 1% in the first to third quantiles on leverage. The results of this paper have important implications since they can interest firm executives, policymakers, and investors operating in emerging markets.