Preprint Article Version 1 NOT YET PEER-REVIEWED

Impacts of Capital Structure on Performance of Banks in a Developing Economy: Evidence from Bangladesh

  1. Department of Finance and Banking, Begum Rokeya University, Rangpur 5400, Bangladesh
  2. International Business College, Dongbei University of Finance and Economics, Dalian 116000, China
  3. Department of Business Management, Skyline University College, Sharjah, UAE
Version 1 : Received: 22 November 2016 / Approved: 22 November 2016 / Online: 22 November 2016 (09:36:36 CET)

How to cite: Siddik, M.; Kabiraj, S.; Joghee, S. Impacts of Capital Structure on Performance of Banks in a Developing Economy: Evidence from Bangladesh. Preprints 2016, 2016110110 (doi: 10.20944/preprints201611.0110.v1). Siddik, M.; Kabiraj, S.; Joghee, S. Impacts of Capital Structure on Performance of Banks in a Developing Economy: Evidence from Bangladesh. Preprints 2016, 2016110110 (doi: 10.20944/preprints201611.0110.v1).

Abstract

Capital structure decision plays an imperative role in firm’s performance. Recognizing the importance, there has been many studies inspected the rapport of capital structure with performance of firms and findings of those studies are inconclusive. In addition, there is relative deficiency of empirical studies examining the link of capital structure with performance of banks in Bangladesh. This paper attempted to fill this gap. Using panel data of 22 banks for the period of 2005-2014, this study empirically examined the impacts of capital structure on the performance of Bangladeshi banks assessed by return on equity, return on assets and earnings per share. Results from pooled ordinary least square analysis show that there are inverse impacts of capital structure on bank’s performance. Empirical findings of this study is of greater significance for the developing countries like Bangladesh because it will call upon concentration of the bank management and policy makers to pursue such policies to reduce reliance on debt and to accomplish optimal level capital structure. This research also contributes to empirical literatures by reconfirming (or otherwise) findings of previous studies.

Subject Areas

capital structure; firm’s performance; panel data; unit root analysis; Bangladesh

Readers' Comments and Ratings (0)

Discuss and rate this article
Views 50
Downloads 39
Comments 0
Metrics 0
Discuss and rate this article

×
Alerts
Notify me about updates to this article or when a peer-reviewed version is published.