THE DETERMINANTS OF BANK CAPITAL STRUCTURE IN THE WORLD

Dung Tran, M. Kabir Hassan, Andrea Paltrinieri () and Trung Duc Nguyen ()
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Andrea Paltrinieri: University of Udine, Via Tomadini 30/A - 33100 Udine, Italy
Trung Duc Nguyen: Banking University Ho Chi Minh City, 700000 Ho Chi Minh City, Vietnam

The Singapore Economic Review (SER), 2020, vol. 65, issue 06, 1457-1489

Abstract: We examine the determinants of bank capital structure using a large sample of banks in the world. We find that banks determine their capital structure in much the same way as non-financial firms, except for growth opportunities. We also provide evidence that country-level factors, such as the legal system, bank-specific factors and economic conditions influence banks’ capital decisions through their impacts on bankruptcy costs, agency costs, information asymmetry and liquidity creation. The results show that, besides the direct effects, there are indirect impacts of country-level factors on the decision of bank capital. Our results have potential policy implications for the on-going regulatory reform.

Keywords: Bank; regulation; capital structure; leverage; risk (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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DOI: 10.1142/S0217590820500010

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