<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The current literature is equivocal and provides inconsistent evidence about the relationship between firms’ performance and capital structure choices. This study adds the empirical evidence on association between capital structure and bank performance to this inconclusive debate. It uses the data of commercial conventional banks listed on various stock exchanges of six Gulf Cooperation Countries (GCC) i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The study uses unbalanced panel data of 50 banks operating in these countries during 2012 to 2017, having 299 bank year observations. ROA and ROE are used as performance variables, with total debt ratio as explanatory variables. Bank size, assets tangibility, earnings volatility, growth, GDP growth rate, and inflation rates are employed as control variables. Three regression techniques, pooled OLS, fixed effects and random effects estimations are used to explore the relationship. The results suggest leverage and the control variables have a substantial effect on the performance of banks but are distinctive in nature as per the banking industry compared to non-financial firms.</p>
</abstract>

The current literature is equivocal and provides inconsistent evidence about the relationship between firms’ performance and capital structure choices. This study adds the empirical evidence on association between capital structure and bank performance to this inconclusive debate. It uses the data of commercial conventional banks listed on various stock exchanges of six Gulf Cooperation Countries (GCC) i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The study uses unbalanced panel data of 50 banks operating in these countries during 2012 to 2017, having 299 bank year observations. ROA and ROE are used as performance variables, with total debt ratio as explanatory variables. Bank size, assets tangibility, earnings volatility, growth, GDP growth rate, and inflation rates are employed as control variables. Three regression techniques, pooled OLS, fixed effects and random effects estimations are used to explore the relationship. The results suggest leverage and the control variables have a substantial effect on the performance of banks but are distinctive in nature as per the banking industry compared to non-financial firms.

The impact of capital structure on bank performace in emerging markets; empirical evidence from GCC countries

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The current literature is equivocal and provides inconsistent evidence about the relationship between firms’ performance and capital structure choices. This...

The impact of capital structure on bank performace in emerging markets; empirical evidence from GCC countries

Data publikacji: 13 kwi 2022

Zakres stron: 56 - 65

Otrzymano: 15 gru 2022

Przyjęty: 07 mar 2022

DOI: https://doi.org/10.2478/fiqf-2022-0005

Słowa kluczowe
capital structure, banks, performance, Gulf Cooperation Council

© 2022 Shoaib Khan, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The impact of capital structure on bank performace in emerging markets; empirical evidence from GCC countries

Data publikacji: 13 kwi 2022

Zakres stron: 56 - 65

Otrzymano: 15 gru 2022

Przyjęty: 07 mar 2022

DOI: https://doi.org/10.2478/fiqf-2022-0005

Słowa kluczowecapital structure, banks, performance, Gulf Cooperation Council

© 2022 Shoaib Khan, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Słowa kluczowe
capital structure, banks, performance, Gulf Cooperation Council