Capital structure and profitability of state-owned enterprises in Namibia

Abstract

Public enterprises require an optimal capital structure mix to fund long-term assets that will generate adequate resources to allow the public enterprises to remain financially sustainable over-time. The aim of this study is thus to examine the association between capital structure and profitability among Namibian commercial SOEs, to determine the direction of causality, if any, and to investigate the factors that impact capital structure among commercial SOEs in Namibia. Understanding the impact of capital structure on the performance of commercial SOEs could help the government and public enterprises to determine the apt level of capital structure that would allow these commercial SOEs to effectively take up their respective mandates. Data for various commercial SOEs for the period 2011-2020 was used in the analysis.