أبحاث إقتصادية معاصرة

Cost Of Equity, Target Leverage, And Capital Structure Adjustment: Evidence From Industrial And Energy Companies

Auteurs : Maamri Amor . Zouaouid Lazhari .

Résumé

This study examines the relationship between the cost of equity and estimated target leverage and investigates capital structure adjustment dynamics in ten industrial and energy companies over 2010–2022. Using a balanced panel of 130 firm-year observations, target leverage is approximated through a fixed-effects model, while leverage dynamics are examined using two-step System Generalized Method of Moments estimation. The findings indicate that the cost of equity is positively but insignificantly associated with estimated target leverage. Similarly, the adjustment-gap coefficient is positive but statistically insignificant, providing insufficient evidence of a systematic adjustment response. Although the diagnostic tests do not reject selected specification restrictions, the small cross-sectional dimension limits the reliability and generalizability of the estimates. The findings highlight the importance of cautious interpretation and suggest that future research should employ larger samples, richer target-leverage specifications, and direct tests of the cost-of-equity effect on adjustment speed.

Mots clés

Cost of Equity; Capital Structure; Speed of Adjustment; System GMM; Financial Leverage.