Abstract
The global repercussions of the COVID-19 pandemic have compelled companies
worldwide to adapt their capital structures. While numerous researchers have
investigated the relationship between COVID-19 and capital structures of companies,
the majority of these studies focus on developed countries. This research seeks to
bridge the gap by exploring the impact of COVID-19 on the capital structure of the Top
40 companies listed on the Johannesburg Stock Exchange (JSE), addressing the
underexplored context of developing countries. Utilising data from the Top 40 JSElisted
companies spanning the period from 2018 to 2022, a panel regression
methodology was employed to conduct a comprehensive analysis. The research
findings, contrary to expectations, indicate that there was no significant relationship
between COVID-19 and the capital structure of these Top 40 JSE-listed companies.
This implies that, surprisingly, the capital structure of these companies did not undergo
substantial changes during the pandemic. This study contributes valuable insights into
the dynamics of capital structure adjustments in the context of developing countries
during a global crisis, shedding light on the resilience or stability exhibited by the Top
40 companies listed on the JSE in the face of the unprecedented challenges posed by
the COVID-19 pandemic.
Key Words
COVID-19, capital structure, debt, gearing, leverage, emerging economy, panel
regression