The Determinants of Capital Structure of the GCC Oil and Gas Companies

Authors

  • Ibrahim Elsiddig Ahmed Ajman University
  • Ariba Sabah Ajman University

Abstract

This study aims to investigate the determinants of capital structure (CS), how they differ among levels (upstream, midstream, and downstream), and to identify Which CS theory is more relevant to the oil and gas companies in the GCC. It uses secondary data of 22 listed oil and gas companies in the GCC over ten years (2010 and 2019). The study will add to the literature as there is few studies about CS in the petroleum industry and it is the only study about the GCC oil and gas sector.  Using pooled ordinary least square (OLS) random effect model, the main findings of this study are; the CS has a positive significant relationship with the size and tangibility, negative with profitability, and insignificant with growth in sales, market to book value, and price to earnings ratio. the research concluded that the GCC oil companies are aligned with both trade-off theory and pecking order theory. The results show that only the determinants of downstream companies are significant, while middle stream and upstream have no significant impact on CS.  One of the limitations is unavailability of data of some governmental oil companies and further research is needed to include non-financial determinants and investigate relationships between CS and the value of companies.Keywords: Capital Structure Determinants; GCC Oil and Gas CS; CS Theory; Debt Asset Ratio; Debt Equity Ratio.JEL Classifications: G32; Q40, N75; L95DOI: https://doi.org/10.32479/ijeep.10570

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Author Biographies

Ibrahim Elsiddig Ahmed, Ajman University

Associate Professor of Accounting & Finance, Head of Accounting Department, Ajman University.

Ariba Sabah, Ajman University

Research Assistant, College of Business Administration, Ajman University.

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Published

2021-02-01

How to Cite

Ahmed, I. E., & Sabah, A. (2021). The Determinants of Capital Structure of the GCC Oil and Gas Companies. International Journal of Energy Economics and Policy, 11(2), 30–39. Retrieved from https://econjournals.com.tr/index.php/ijeep/article/view/10570

Issue

Vol. 11 No. 2 (2021)

Section

Articles

License

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