Determinants of Capital Structure: Evidence from the Banking Sector

Authors

  • Abdul Basit Solangi PhD Scholar, Institute of Commerce & Management, Faculty of Management Sciences, Shah Abdul Latif University, Khairpur Sindh, Pakistan
  • Ikhtiar Ahmed Khoso Director, Center for Entrepreneurial Leadership and Incubation IBA University Sukkur, Sindh, Pakistan
  • Mansoor Ahmed Soomro Assistant Professor, Department of Business Administration, Shah Abdul Latif University, Khairpur Shahdadkot Campus, Sindh, Pakistan

DOI:

https://doi.org/10.35484/ahss.2022(3-III)29

Keywords:

Capital Structure Determinants, Growth, Inflation, Leverage, Pakistani Banks, Profitability, Size, Tangibility

Abstract

The main objective of this research is to investigate the capital structure determinants of Pakistani banks working at national and international levels. The purpose was to explore which variables influence the capital structure more. Data was gathered from the published report of the State Bank of Pakistan (SBP) and Pakistan Stock Exchange (PSX) website from the period 2010-2019 year. Twenty-four bank reports were compiled and analyzed who work at national and international levels. Eviews software was used to analyze the data in which descriptive, covariance correlation, and regression analysis were carried through by Ordinary Least Square (OLS) method. The results show that all five independent variables have a negative relationship except firm size on leverage which could be due to the firms' nature of business. This research concluded that ROA has a substantial negative impact on leverage; as ROA increase, it will reduce the leverage. TGB has a moderate negative, and GTH and INF have a weak negative on leverage, meaning TGB, GTH, and INF increases will reduce the leverage. SZ has a weak positive impact on leverage means Size will impact positively as size increases, and it will also increase leverage.

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Published

2022-11-27

Details

    Abstract Views: 185
    PDF Downloads: 77

How to Cite

Basit Solangi, A., Ahmed Khoso, I., & Ahmed Soomro, M. (2022). Determinants of Capital Structure: Evidence from the Banking Sector. Annals of Human and Social Sciences, 3(3), 299–313. https://doi.org/10.35484/ahss.2022(3-III)29