ABSTRACT
We examine the impact of the economic reform programme on the financing choices of Zimbabwean listed companies. Using the published accounts of a sample of companies, we show that listed firms rely heavily on external finance, especially short-term bank financing. We estimate an eclectic econometric model of firms’ capital structure based on key predictions from the theory of finance, augmented by variables aimed at capturing the impact of Zimbabwe’s reform programme. The analysis shows that an orthodox model has little explanatory power over firms’ capital structure in the pre-reform period, but in the post-reform156 period it does better. The differences between the pre-reform and post-reform era suggest that the reforms achieved partial success in opening up the capital markets and improving the transparency of firm financing behaviour. [Article copies available for a fee from The Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address: <docdelivery@haworthpress.com> Website: <https://www.HaworthPress.com> © 2003 by The Haworth Press, Inc. All rights reserved.]
