Journal of Applied Finance & Banking

Corporate Debt Choice and Board Size: The Case of Oil Exporting Economy

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  • Abstract


    This paper investigates the role of firmsí board size on capital structure decisions in an oil-based economy. Using a sample of 121 listed firms in Saudi capital Market, over the 2009-2016 period, we find a strong negative linkage between board size and debt choice. Our findings suggest that strong corporate governance practice enforce the usage of lower debt financing to promote firmsí performance. This finding provides important implications for investors and policymakers. Our conclusion still unchanged before and after the global oil prices drop and after applying alternative methodology. 


    JEL classification numbers: G3, G32, G34

    Keywords: Capital Structure; Corporate Governance; Board Size; Oil-Based Economy.