n African Finance Journal - Financial policy and corporate performance : evidence from emerging market economies

Volume 11, Issue 1
  • ISSN : 1605-9786



This paper analyses the effects of financial policy on corporate performance of emerging market firms. Using capital structure and dividend payout as measures of financial policy, we employ fixed effects panel model in our estimation. The results indicate that capital structure has negative effects on return on assets and return on equity but is positively related with market-to-book value ratio. Dividend payout is also positively related with return on assets and return on equity. We also document that macro-level factors such as stock market development and GDP per capita are relevant in explaining corporate financial performance.

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