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

Purpose - 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. Design/methodology/approach - Multiple regression analysis is used in the study in estimating the relationship between the leverage level and firm's performance. Findings - 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. Originality/value - This is the first study that examines the relationship between leverage level and firm performance in Egypt.