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This chapter examines the determinants of capital structure – specifically gearing – among listed companies in the Gulf Cooperation Council (GCC) countries, based on data from 1,772 firms spanning the period from 2009 to 2016. The combined GDP of the GCC is approximately $1.6 trillion, with a total population of around 56 million. The primary aim of this research is to assess whether the factors influencing gearing in GCC countries align with those commonly found to affect the capital structures of firms in developed economies. Employing ordinary least squares (OLS) regression analysis, the study investigates the relationship between a broad range of explanatory variables – growth, size, profitability, tangibility, liquidity, free cash flow, and risk – and various measures of gearing used as dependent variables. The findings indicate statistically significant relationships between these explanatory variables and the different measures of gearing. Overall, the results suggest that the determinants of gearing in GCC firms, as identified in the extant literature, are also applicable to firms in other developing economies.

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What Shapes Gearing Strategy? Lessons from GCC Corporations

  • 章节

  • 发表日期：

    2025年

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  • Maqsood Qureshi,
  • Saeed Askary,
  • Binam Ghimire

摘要

This chapter examines the determinants of capital structure – specifically gearing – among listed companies in the Gulf Cooperation Council (GCC) countries, based on data from 1,772 firms spanning the period from 2009 to 2016. The combined GDP of the GCC is approximately $1.6 trillion, with a total population of around 56 million. The primary aim of this research is to assess whether the factors influencing gearing in GCC countries align with those commonly found to affect the capital structures of firms in developed economies. Employing ordinary least squares (OLS) regression analysis, the study investigates the relationship between a broad range of explanatory variables – growth, size, profitability, tangibility, liquidity, free cash flow, and risk – and various measures of gearing used as dependent variables. The findings indicate statistically significant relationships between these explanatory variables and the different measures of gearing. Overall, the results suggest that the determinants of gearing in GCC firms, as identified in the extant literature, are also applicable to firms in other developing economies.