Financial Reform and Financing Decisions of Listed Firms in Zimbabwe
Year: 2003
Type: article
Abstract: We examine the impact of the economic reform programme on the financing choices of Zimbabwean listed companies. Using the published accounts of a sample of companies, we show that listed firms rely heavily on external finance, especially short-term bank financing. We estimate an eclectic econometric model of firms' capital structure based on key predictions from the theory of finance, augmented by variables aimed at capturing the impact of Zimbabwe's reform programme. The analysis shows that an orthodox model has little explanatory power over firms' capital structure in the pre-reform period, but in the post-reform period it does better. The differences between the pre-reform and post-reform era suggest that the reforms achieved partial success in opening up the capital markets and improving the transparency of firm financing behaviour.
Source: Journal of African Business
Authors: Enard Mutenheri, Christopher J. Green
Institution: Loughborough University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2166182900