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Determinants of Capital Structure of Banks: Evidence from Sub-Sahara Africa

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  • Ebenezer Bugri Anarfo

Abstract

This study seeks to examine the determinants of capital structure of banks in Sub-Sahara Africa. This study has employed the use of panel data techniques to analyze the determinants of capital structure of banks in sub-Sahara Africa The dependent variables used in the study were short-term debt ratio (STDR), long-term debt ratio (LTDR) and the total debt ratio (TDAR). The independent variables were: return on asset (ROA), asset tangibility (TANG), Size of the bank (SIZE), growth rate of total assets (GROWTH), corporate marginal tax rate (TAX ), GDP growth rate (GDPGR), interest on loans (INTEREST), inflation rate (INFLR)The results from Levin-Lin-Chu and Im-pesaran-shin unit root test show that all the variables were stationary in levels. The results also indicate that, the return on asset, size, asset tangibility, growth rate of banks and inflation rates are statistically significant in determining the capital structure of banks in Sub-Sahara Africa. However, corporate marginal tax rate, GDP growth rate and the interest rate on loans are not statistically significant in determining banks capital structure in Sub-Sahara Africa.

Suggested Citation

  • Ebenezer Bugri Anarfo, 2015. "Determinants of Capital Structure of Banks: Evidence from Sub-Sahara Africa," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(4), pages 624-640.
    • Handle: RePEc:asi:aeafrj:v:5:y:2015:i:4:p:624-640:id:1364
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    Cited by:

    1. Iddrisu Suhaibu & Abdulai Abdul‐Malik, 2021. "Debt policy, firm value, and the macroeconomic environment nexus: Evidence from non‐financial sector firms in Ghana," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 2106-2117, April.
    2. Tharinee Pongsupatt & Apichat Pongsupatt, 0000. "Determinants Of Capital Structure On Banking Sector Case Study: Listed Company In Thailand Stock Exchange," Proceedings of Economics and Finance Conferences 14115977, International Institute of Social and Economic Sciences.
    3. Athenia Bongani Sibindi, 2018. "The Determinants of South African Banks' Capital Buffers," Journal of Economics and Behavioral Studies, AMH International, vol. 10(1), pages 234-244.
    4. Mr David Amoako & Dr. Edward Domina Attafuah, 2024. "Assessing the Effect of Leverage on the Performance of Firms in an Emerging Economy," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(9), pages 1096-1113, September.

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