The Correlation Between Capital Structure Determinants and Corporate Sustainability: Insights from GCC Countries

Abstract

The present study aims to identify the relationship between capital structure determinants namely (Liquidity, Profitability and Age) and corporate sustainability measured by (social performance and environmental performance). the populations of this study concern about companies listed in GCC region from six countries which consist of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates . Besides, only firms that have at least 3-year complete data for all the variables remain in the sample. Thus, there are left with unbalanced panel data of 1680 observations for 210 firms for the period of 2015-2022. The study hypotheses that there is no correlations between these factors and corporate sustainability while the results indicate that there is a positive correlations between liquidity and profitability from one side and corporate sustainability from other side, while age show negative correlations with corporate sustainability. The current study provides evidence that the capital structure factors are correlated to sustainability by the same factors as in other developing countries.