Abstract:
Unemployment and lack of economic growth have been an issue in South Africa. This
research project studied the impact debt leverage has on a companyÕs ability to grow
revenue and create jobs. Most recent literature focused on debt leverage and the increase
in company investment but not extensively in company revenue growth. Furthermore,
most literature was based on the developed economies. Also, the emphasis of most
recent literature was on metrics that would benefit the investor more than it would benefit
broad-based economic interests. A panel data regression was used to analyse crosssectional
data primarily sourced from ÔMcGregor BFA Research DomainÕ. This analysis
covered 74 publicly-listed South African companies which were from manufacturing,
mining or construction sectors from 1992 to 2017. From this, it was found that debt
leverage does not predict company growth or job creation. However, it was found that
short-term debt leverage does predict company growth for companies whose total assetsÕ
market value is less than total assetsÕ book value. Additionally, it was found that company
size can, under most conditions, predict company growth and job creation.
