The effect of economic determinants on capital structure

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The study investigates the impact of macroeconomic factors on the capital structure of nonfinancial joint stock companies in Saudi Arabia, utilizing multiple regression models. Analyzing data from 15 listed companies and the World Bank (2009-2016), it reveals a significant relationship between inflation and leverage, prompting companies to finance investments accordingly. Conversely, GDP growth shows an inverse relationship with various debt forms. The findings suggest that firms should monitor inflation closely, as past capital structures influence current financial decisions.