10 th ERF Conference (Marrakesh, Morocco, 16-18 December 2003) DETERMINANTS OF FINANCIAL PRACTICES AMONG MOROCCAN INDUSTRIAL FIRMS (*) Sidi Mohamed RIGAR and Brahim MANSOURI (**) , Faculty of Law and Economics, Cadi Ayyad University, Marrakesh, Morocco. Email: mrigar@hotmail.com Email: b-mansouri@lycos.com • Introductory Remarks Judicious choice of the better combination of self-financing and borrowing is one of the thorniest problems that firms seek often to solve in the area of financing. Such dosage of financing is often the result of a policy of financing that quantifies in monetary terms, the targeted objectives in the framework of the overall strategy of firms. Our research problem consists of exploring determinant variables of the choice of means of financing by Moroccan industrial firms, trying to shed light on various behavioral financial profiles of firms. The choice of industrial firms is dictated by the fact that firms operating in the industrial sector need more permanent funds to finance their long-term investment and exploitation cycles. The starting point in our research is the observation that most of the Moroccan industrial firms are under-capitalized. Following reforms concerning all compartments of the Moroccan capital market, the objective of this paper is to better understand practices of financing among industrial firms, combining theoretical foundations and comprehensive understanding of the Moroccan financial environment. The remainder of our research paper is organized as follows. Section II summarizes the theoretical debate on optimal choice of corporate financial structure. The central question of the debate concerns relationships between means of financing brought about by the firm and the value of firm’s worth. Section III tries to highlight major mutations of the financial and tax environment of the Moroccan corporate sector, which have to affect decisions of financing. Section IV centers on empirical assessment of various theoretical propositions through deeper analysis of financing practices of the Moroccan corporate sector, using data from a comprehensive survey of a sample of 105 representative industrial corporations. (*) - The authors thank anonymous referees for their remarks and suggestions. (**) - Sidi Mohamed RIGAR is Assistant Professor and Brahim MANSOURI is Qualified Professor (Professeur Habilité) of economics at the Faculty of Law and Economics (Cadi Ayyad University, Marrakesh, Morocco).