Firm Level Determinants of Capital Structure in Algeria

Résumé

This study analyzes the capital structure determinants in a sample of 207 non-financial Algerian enterprises (2013-2017). The Tobit-panel random effects model gives the following results: the firm-level determinants at the 1% level are: the profitability, the tangibility, the debt-tax shield DTS and the non-debt tax shield NDTS. A profitable company can easily take on debt at low interest rates. The tangible assets are used as collateral. The Algerian enterprises take on debt in order to benefit from the debt-tax deductibility. The positive impact of the DTS variable confirms the positive impact of the profitability variable. The debt-tax deductibility works when a company is profitable. The NDTS is an alternative funding source for the enterprises. For the state-owned subsample, the debt ratio decreases when the firm size increases. The small state-owned enterprises have low self-financing. These enterprises are financed by the debt. For the services field subsample, the liquidity is used as collateral.