Financial crisis and determinants of capital structure of investment banking sector in Pakistan

Ajab Khan Burki
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Ajab Khan Burki: Department of Management Science, Bahria University Islamabad, Pakistan

Journal of Administrative and Business Studies, 2017, vol. 3, issue 3, 154-161

Abstract: The aim of this paper is to add in the incumbent literature of capital structure by estimating the capital structure’s determinants of investment banking sector of Pakistan for the period of 2004-11 and the effect of the financial crisis (2007-08) on these determinants in deciding debt to equity choice on the firm level. This article utilizes the balanced panel econometric techniques for catering the said objectives. The previous works of notable scholars are thoroughly reviewed for capital structure. Similarly, the balanced panel econometric techniques are used for examining the implication of financial crisis on deciding for firm’s financing. The effect is estimated by dividing the sample period into two parts: pre (2004-06) and post (2009-11) financial crisis. The outcomes suggest that determinants of capital structure are the same as utilized in the advanced economies. Besides, this paper entails a strong evidence of financial crisis’ effect on capital structure’s determinants in investment banking sector of Pakistan. This paper produces a fresh outlook into determining the capital structure’s determinants from the perspective of investment banking sector of Pakistan. Secondly, this paper produces a valuable addition to the incumbent literature by determining the effect of the financial crisis on capital structure decision making based on the given determinants.

Keywords: Capital structure; Investment banking sector; Financial crisis (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:apb:jabsss:2017:p:154-161

DOI: 10.20474/jabs-3.3.5

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