Financial Structure of Tunisian Companies

The determinants of capital structure remain an important issue in the empirical literature. This study examines the capital structure choices of Tunisian firms, focusing on the impact of market timing. The market timing theory developed by Baker and Wurgler (2002) has received considerable attention in recent years. Baker and Wurgler (2002) argue that a firm's history of market timing has a long-term impact on its capital structure and, consequently, that capital structure is the result of successive attempts to 'time' the market. This study examines the findings of Baker and Wurgler (2002) in a Tunisian context. Empirical tests carried out on a sample of 28 listed companies over the period 2006-2014 show that the results found are relatively at odds with recent findings which assert that firms' financing choices are guided by timing considerations. In our study, we use the generalised method of moments (GMM).