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Does Corporate Governance Influence Leverage Structure in Bangladesh?

Mohammad Nazim Uddin (), Mohammed Shamim Uddin Khan and Mosharrof Hosen ()
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Mohammad Nazim Uddin: Department of Business Administration, International Islamic University Chittagong, Kumira 4314, Bangladesh
Mohammed Shamim Uddin Khan: Department of Finance, University of Chittagong, Chittagong 4331, Bangladesh
Mosharrof Hosen: Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Perak Campus, Kampar 31900, Malaysia

International Journal of Financial Studies, 2019, vol. 7, issue 3, 1-16

Abstract: This paper examines the regulation of corporate governance on leverage structure decision-making in Bangladesh from 2003 to 2017. Appropriate panel methods are employed to control the problems of serial correlation, heteroskedasticity, and the cross-sectional nature of manufacturing companies. The study finds that corporate governance attributes such as board size, managerial ownership, and duality are the dominant factors for leverage decision-making. The results also indicate that control variables such as firm size and profitability have an influential role on leverage decision-making in Bangladesh. Our findings substantiate the idea that political and family connections to corporate governance structure greatly influence the leverage decision-making of corporate firms in Bangladesh.

Keywords: board size; managerial ownership; duality; leverage structure; Bangladesh (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 F2 F3 F41 F42 (search for similar items in EconPapers)
Date: 2019
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