The impact of capital‐structure choice on firm performance: empirical evidence from Egypt

The purpose of this paper is to empirically investigate the impact of capital structure choice on firm performance in Egypt as one of emerging or transition economies.

Multiple regression analysis is used in the study in estimating the relationship between the leverage level and firm's performance.

Using three of accounting‐based measures of financial performance (i.e. return on equity (ROE), return on assets (ROA), and gross profit margin), and based on a sample of non‐financial Egyptian listed firms from 1997 to 2005 the results reveal that capital structure choice decision, in general terms, has a weak‐to‐no impact on firm's performance.

This is the first study that examines the relationship between leverage level and firm performance in Egypt.