The determinants of capital structure of listed banks in Jordan: panel data analysis

Ali Mustafa Abdullah Al-Qudah

International Journal of Economics and Business Research, 2014, vol. 8, issue 1, 36-46

Abstract: This study examines the determinants of capital structure of banks in Jordan by using a sample of 15 listed banks through the period 2006 to 2010. Panel data analysis is employed to determine the determinants of capital structure of banks in Jordan. The results show that size has a positive and significant impact on total liabilities to equity ratio, book leverage and market leverage while it has a positive insignificant impact on deposit leverage and non-deposit leverage. The results also show that market to book ratio has a positive and significant impact on all study leverage measures except non-deposit leverage. Profitability has a mixed impact, since it has a positive significant impact on non-deposit leverage, positive insignificant impact on book leverage and market leverage, and negative significant impact on deposit leverage and total liabilities to equity ratio. The finding also reveal that tangibility is a good determinant of non-deposit leverage and total liabilities to equity ratio and banks in Jordan funded 70% of its assets by customers' deposits.

Keywords: capital structure determinants; banks; leverage; Jordan; banking industry; panel data. (search for similar items in EconPapers)
Date: 2014
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