Debt Ratio Analysis and Firm Investment: Evidence from Jordan

Faris Nasif Al-Shubiri

Abstract


This paper examines whether the total debt ratio and bank ratio of listed companies have any impact on their fixed investment during the years in 2004-2009, and whether this impact, if it existed, differed among companies with differing investment opportunities. The study has reveals the total debt ratio did have a negative impact on fixed investment among Jordanian listed companies. It has also been found that the bank ratio had a stronger impact on fixed investment than the total debt ratio.

Keywords: Bank loan; Debt; Investment; Jordan

JEL Classifications: G31, G32, E22 

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