Abstract
<p>This study analyses the determinants of short-term debt financing using the generalised method of moment (GMM) of estimation to attest whether it follows a partial adjustment process. The study analyses data collected for 92 firms listed on the JSE Securities Exchange (JSE) for the period 2001 to 2010. The evidence obtained from the study suggests that firms have a target level of short-term debt and follow an adjustment process towards the target level. Spontaneous and internal resources, investment opportunities and the state of the economy play an important role in the use of short-term debt as a short-term financing instrument among the listed companies. The study recommends that managers pay particular attention to the key factors that drive the use of short-term debt because of its importance in financing working capital.</p>
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