Intellectual capital and institutional governance as capital structure determinants in the tourism sector

Dalwai, T ORCID: https://orcid.org/0000-0001-5754-5384 and Sewpersadh, NS, 2023. Intellectual capital and institutional governance as capital structure determinants in the tourism sector. Journal of Intellectual Capital, 24 (2), pp. 430-464. ISSN 1469-1930

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Abstract

Purpose: This study investigates the capital structure determinants of the Middle East tourism sector by examining intellectual capital (IC) efficiency and institutional governance along with firm-specific and macroeconomic variables. This research also identifies the determinants of capital structure for tourism companies in the Gulf Cooperation Council (GCC) and non-GCC countries.

Design/methodology/approach: Data were collected from 45 listed tourism companies of nine Middle Eastern countries over five years from 2014 to 2018. The data were analysed using ordinary least squares (OLS) regression and checked for robustness using the generalised methods of moment (GMM) estimation.

Findings: Overall, the results indicate that tourism companies rely more on short-term debt (STD) than long-term debt (LTD), thus decreasing liquidity and increasing financial risk. Furthermore, tourism companies in non-GCC countries have higher IC efficiency compared to those in GCC countries. The aggregate institutional index is much higher for GCC countries compared to non-GCC countries. The OLS estimations suggest IC efficiency and institutional governance index provide inconclusive evidence as a determinant of capital structure proxy. High capital employed efficiency (CEE) is associated with more leverage for tourism firms. Theoretically, the results support pecking order and trade-off theories due to the relationships between firm-specific indicators and debt.

Originality/value: This study closes the gap in the capital structure debate by providing valuable insights into IC efficiency and institutional governance. These two factors serve as capital structure determinants in the Middle East and the GCC and non-GCC regions.

Item Type:	Journal article
Publication Title:	Journal of Intellectual Capital
Creators:	Dalwai, T. and Sewpersadh, N.S.
Publisher:	Emerald
Date:	21 March 2023
Volume:	24
Number:	2
ISSN:	1469-1930
Identifiers:	Number Type 10.1108/jic-03-2021-0085 DOI 1878997 Other
Rights:	© 2021, Emerald Publishing Limited. This AAM is provided for your own personal use only. It may not be used for resale, reprinting, systematic distribution, emailing, or for any other commercial purpose without the permission of the publisher.
Divisions:	Schools > Nottingham Business School
Record created by:	Laura Ward
Date Added:	25 Mar 2024 12:04
Last Modified:	25 Mar 2024 12:04
URI:	https://irep.ntu.ac.uk/id/eprint/51152

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