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Determinants of capital structure in banking sector: a Bangladesh perspective

Author

Listed:
  • Mohammad Nayeem Abdullah

    (Chittagong Independent University)

  • Emon Kalyan Chowdhury

    (Chittagong Independent University)

  • Rahat Bari Tooheen

    (Chittagong Independent University)

Abstract

This paper identifies the determinants of the capital structure of conventional and Islamic banks in Bangladesh. A multivariate regression model has been established to test the influence of return on asset, tangibility, liquidity, growth, and financial market development on the leverage of 23 conventional and 8 Islamic banks listed on the Dhaka Stock Exchange. Data have been collected from the audited annual reports of the selected banks from 2015 to 2020. It is observed that the variables have positive impact on the leverage except tangibility. Return on asset, tangibility and liquidity have significant impact while other variables have insignificant impacts. It is expected that the empirical outcome-based recommendations of this study will benefit the bankers, policymakers and investors to formulate appropriate policies through striking an ideal balance of leverage.

Suggested Citation

  • Mohammad Nayeem Abdullah & Emon Kalyan Chowdhury & Rahat Bari Tooheen, 2022. "Determinants of capital structure in banking sector: a Bangladesh perspective," SN Business & Economics, Springer, vol. 2(12), pages 1-19, December.
    • Handle: RePEc:spr:snbeco:v:2:y:2022:i:12:d:10.1007_s43546-022-00370-8
    DOI: 10.1007/s43546-022-00370-8
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    11. Stasi, Federer & Pierro, Roberto & Shaturaev, Jakhongir, 2024. "The Financial Implications of Mandating Non-Financial Assurance," MPRA Paper 121883, University Library of Munich, Germany, revised 14 Jun 2024.

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    More about this item

    Keywords

    Capital structure; Conventional banks; Islamic banks; Leverage; Multivariate regression;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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