Impact of Firm Specific Factors on Capital Structure Decision: An Empirical Study of Bangladeshi Companies

Md. Faruk Hossain () and Md. Ayub Ali ()
Additional contact information
Md. Faruk Hossain: Northern University Bangladesh, Bangladesh
Md. Ayub Ali: University of Rajshahi, Bangladesh

International Journal of Business Research and Management (IJBRM), 2012, vol. 3, issue 4, 163-182

Abstract: Abstract This study attempts to explore the impact of firm specific factors on capital structure decision for a sample of 39-firm listed on Dhaka Stock Exchange (DSE) during 2003-2007. To achieve the objectives, this study tests a null hypothesis that none of the firm’s specific factors namely profitability, tangibility, non-debt tax shield, growth opportunities, liquidity, earnings volatility, size, dividend payment, managerial ownership, and industry classification has significant impact on leverage using estimate of fixed effect model under Ordinary Least Square (OLS) regression. Checking multicollinearity and estimating regression analysis through Pearson correlation and autoregressive mode respectively this study found that profitability, tangibility, liquidity, and managerial ownership have significant and negative impact on leverage. Positive and significant impact of growth opportunity and non-debt tax shield on leverage has been found in this study. On the other hand size, earnings volatility, and dividend payment were not found to be significant explanatory variables of leverage. Results also reveal that total debt to total assets ratios are significantly different across Bangladeshi industries.

Keywords: Capital structure; Leverage; Firm’s specific factors; Dhaka Stock Exchange Bangladesh.; Capital Structure; Leverage; Firm’s Specific Factors; Dhaka Stock Exchange; Bangladesh (search for similar items in EconPapers)
JEL-codes: M0 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.cscjournals.org/manuscript/Journals/IJ ... /Issue4/IJBRM-94.pdf (application/pdf)
https://www.cscjournals.org/library/manuscriptinfo.php?mc=IJBRM-94 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aml:intbrm:v:3:y:2012:i:4:p:163-182

Access Statistics for this article

International Journal of Business Research and Management (IJBRM) is currently edited by Dr. Mattei Cristofaro

More articles in International Journal of Business Research and Management (IJBRM) from Computer Science Journals (CSC Journals)
Bibliographic data for series maintained by Nabeel Tahir ().