Frans N.S. Vermaak

Structural breaks in the parameter estimates of the determinants of capital structure: Some evidence from the JSE

Purpose - This paper aims to test the effects of financial reforms on the structural stability of the parameter estimates in the determinants of capital structure. Design/methodology/approach - A panel of 100 non-financial companies listed on the Johannesburg Stock Exchange is constructed, and a panel least squares estimation technique is used to test for lagged, current and leading structural breaks in the firm specific determinants of leverage. Findings - The results show that structural reforms have a significant role in influencing the empirical relationship between leverage and its determinants. Specifically, the lifting of international sanctions and stock market liberalisation have a significant impact on the stability of the profitability, growth and tax rate variables for the book and market values of the debt to equity ratio. Furthermore, when the total and short term debt ratios are considered, only stock market liberalisation appears to have a significant influence on the stability of the profitability parameter. Originality/value - This paper adds to the existing body of literature on capital structure by documenting the extent of structural breaks in the parameter estimates of the relationship between leverage and firm specific determinants of capital structure for listed non-financial firms in South Africa.

The balanced scorecard as a potential instrument for supporting the planning and improvement of accounting education in South Africa

This paper illustrates the potential of the balanced scorecard as an instrument for accounting educators to guide, stimulate and sustain efforts in respect of planning and improvement in the accounting education environment. The results of the reported survey among the heads of eleven accounting departments at South African universities support the potential applicability of the balanced scorecard in this regard.

Impact of financial liberalisation on capital structure: Evidence from the Johannesburg Securities Exchange

This study tested the impact of financial liberalisation on a panel of non financial firms listed on the Johannesburg Stock Exchange. Using fixed, random effects and instrumental variable models, it was found that the removal of international sanctions and stock market liberalisation have a significant negative impact on most measures firm leverage. Capital account liberalisation has a direct and significant impact on firm leverage and the impact of domestic financial sector liberalisation on capital structure is weak. Firms increase their debt maturity structure following stock market liberalisation. The effects of financial liberalisation are more pronounced on larger firms.