Determinants of capital structure in banking sector: a Bangladesh perspective

Mohammad Nayeem Abdullah, Emon Kalyan Chowdhury () and Rahat Bari Tooheen
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Mohammad Nayeem Abdullah: Chittagong Independent University
Emon Kalyan Chowdhury: Chittagong Independent University
Rahat Bari Tooheen: Chittagong Independent University

SN Business & Economics, 2022, vol. 2, issue 12, 1-19

Abstract: 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.

Keywords: Capital structure; Conventional banks; Islamic banks; Leverage; Multivariate regression (search for similar items in EconPapers)
JEL-codes: E50 G24 M48 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (12)

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DOI: 10.1007/s43546-022-00370-8

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