How Firm Specific Characteristics Determine Capital Structure: Empirical Evidence

The purpose of this study is to investigate how firm-specific characteristics determine capital structure as empirical evidence on Jordanian firms listed on Amman exchange market. In which study covers 80 firms (55) manufacturing and (25) service firms for the period (2001 - 2006). The study used ordinary least squares (OLS) regression technique to provide an evidence how firm—specific characteristics presented by tangible assets, size, growth, profitability and risk which is derived from tradeoff and pecking order theories to determine capital structure presented by short term debt ratio, long term debt ratio and total debt ratio. Furthermore, the regression results proved that firm characteristics play important role to determine capital structure.