The Effects of Capital Structure on Firm’s Performance among Listed Non-Financial Corporations in Dar es Salaam Stock Exchange.

Andrew, Reuben Mwanja (2020) The Effects of Capital Structure on Firm’s Performance among Listed Non-Financial Corporations in Dar es Salaam Stock Exchange. Masters thesis, The Open University of Tanzania.

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Abstract

The aim of this study was to determine the relationship between capital structure and firm performance of listed non-financial corporations in Tanzania. The study used panel data for the period of 5 years from 8 non-financial firms listed on the Dar es salaam Stock Exchange. Study use mixed model repeated measure to estimate the relationship between capital structure and firm performance where, capital structure was proxied by debt ratio and debt-to equity ratio while performance was proxied by return on assets and return on equity. The study revealed Tanzania listed non-financial firms are financed more by equity capital than debt financing. Results also show that listed non-financial firms perform below average. The study results indicate significant negative relationship between return on assets and debt to equity ratio, return on assets and debt ratio, and return on equity and debt ratio. However, the relationship between return on equity and debt to equity ratio was positive but insignificant. The results are consistent with previous studies conducted by Kipesha and Moshi (2014); Pastor et al. (2011); Kandongo et al. (2014); Anarfo (2015); Kajananthan et al. (2013); Hassan et al. (2012). Keywords: Capital structure, Firm performance, financial corporations, Tanzania.

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