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The Impact of Banking Sector Development on Capital Structure of Non-financial Sector Firms in Pakistan

Umar Farooq (), Jaleel Ahmed Malik and Lakhi Muhammad

Journal of Accounting and Finance in Emerging Economies, 2018, vol. 4, issue 2, 177-188

Abstract: Objective: This study exemplifies how banking sector development influences capital structure of non-financial Sector firms. Methodology: In this study, deductive approach has been used and capital structure used as explained variable. Banking sector development used as explanatory variable and proxies by five key ratios. The six years data ranges from the year 2010 to 2015 used and fixed effect model applied for regression analysis. Findings: The statistical results indicate that first and 4th hypotheses partially accepted while second and third hypotheses fully rejected. The results of study recommend financing policy for finance mangers to consider banking sector development while deciding capital structure. Originality: This study may mark as first study in Pakistan which checks the regression among discussed variables and also the behavior of change.

Keywords: Return on Assets; Capital Adequacy Ratio; Debt to Asset Ratio; Debt to Equity Ratio (search for similar items in EconPapers)
Date: 2018
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DOI: 10.26710/jafee.v4i2.400

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Handle: RePEc:src:jafeec:v:4:y:2018:i:2:p:177-188