The Impact of Capital Structure on the Financial Performance of Energy Companies in Saudi Arabia
Any decision which a negative impact on profitability will have has to be abandoned. Profitability has been given considerable importance in finance related research. The firm can finance its assets either through debt or equity. But the mix of both would be the best choice.
This price fluctuation was dealt with different measures by countries, companies and even whole industries. For example, Japan began distancing itself from oil-intensive industries, The United States began auditing their production capacities and the world’s automotive industry began producing more fuel-efficient cars. The second oil shock started in 1979 and was the result of the Iranian revolution, when the Shah of Iran, Mohammad Reza Pahlavi, was forced in exile and the Ayatollah Khomeini became the new leader of Iran.
The concept of a whole supply chain is evident in the company, which makes it agile enough to be in a position of meeting demands, the growing competition and the dynamism in the industry (Chopra and Meindl 237).In some cases, firms intending to undertake foreign direct investment are required to form partnerships with other private or public firms in the host countries (Wisner, 10). This limits the operational efficiency of the firm. Formation of free trade agreements eliminates barriers related to foreign direct investment.
Using a vector error correction model, the paper found a robust estimate that proves the positive impact of financing on economic growth in Saudi Arabia. Furthermore, the Granger-Causality Wald test indicates that financing influences economic growth in Saudi Arabia.
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