Factors Influencing The Financial Composition Of Moroccan Companies Listed On The Stock Exchange In The Agri-Food, Real Estate, And Hotel Sectors

Abstract

Our research primarily aims to explain the financial composition of companies through an empirical study that seeks to examine how publicly traded companies in the agri-food, real estate, and hospitality sectors in Morocco manage their debt levels between 2016-2019 by testing two theories: Pecking Order Theory (POT) and Trade Off Theory (TOT). The financial composition of a company refers to how it allocates the use of funds between debts contracted with financial institutions and equity. Analyzing this financial composition through the balance sheet allows for a better appreciation and understanding of how companies can finance their operations and the various approaches used for this purpose. In other words, it highlights the relationship between debts and equity. This composition is not static and can vary based on the financial constraints related to the company's activities and the investment decisions made by management. The sample for this study consists of 15 companies from the agri-food and real estate/hospitality sectors listed on the stock exchange. To better guide our work, we chose two models to address our main issue. The first model, through an estimation using panel data econometrics, we selected a dependent variable (_d) and two explanatory variables (D_Dt-1 and DEF). The findings from this work show that the financial structure behavior of these companies is mixed, meaning that Moroccan companies listed on the stock exchange aim to achieve an optimal debt ratio and prioritize their financing methods.