This study tests the explanatory power of the pecking order theory (POT) in shaping the financing decisions of non-financial firms listed on the Palestine Exchange (PEX), an under-researched, politically unstable emerging market. Using panel data for 29 firms over the period 2005–2019, we examine whether debt issuance is primarily driven by financial deficits and whether this relationship outweighs the influence of conventional capital structure determinants. Three empirical models are estimated: (1) testing the direct link between net debt issuance and financial deficit; (2) assessing whether financial deficit crowds out the explanatory power of firm-specific variables; and (3) examining leverage determinants consistent with POT predictions. Panel least squares serves as the primary estimation method, with robustness confirmed through fixed effects, random effects, lagged specifications, and GMM system …

العنوان

International Review of Economics

الناشر

Springer

بلد الناشر

الولايات المتحدة الأمريكية

Indexing

Scopus

معامل التأثير

1,0

نوع المنشور

Both (Printed and Online)

المجلد

72

السنة

2025

الصفحات

--