This paper investigates the role of firmsí board size on capital
structure decisions in an oil-based economy. Using a sample of 121 listed firms
in Saudi capital Market, over the 2009-2016 period, we find a strong negative linkage between board size and
debt choice. Our findings suggest that strong corporate governance practice
enforce the usage of lower debt financing to promote firmsí performance. This
finding provides important implications for investors and policymakers. Our conclusion
still unchanged before and after the
global oil prices drop and after applying alternative methodology.
JEL classification numbers: G3, G32, G34
Keywords: Capital Structure; Corporate
Governance; Board Size; Oil-Based Economy.