Bank Characteristics Effect on Capital Structure: Evidence from PMG and CS-ARDL
Autor: | Ahmet Adalier, Husam Rjoub, Ahmet Erülgen |
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Rok vydání: | 2020 |
Předmět: |
Distributed lag
Leverage (finance) CS-ARDL Capital structure Equity ratio lcsh:Risk in industry. Risk management bank size Net interest income optimum capital structure lcsh:Finance lcsh:HG1-9999 0502 economics and business ddc:330 Econometrics Economics profitability 050207 economics 050208 finance Tax shield PMG 05 social sciences financing lcsh:HD61 Market liquidity Panel data |
Zdroj: | Journal of Risk and Financial Management Volume 13 Issue 12 Journal of Risk and Financial Management, Vol 13, Iss 310, p 310 (2020) |
ISSN: | 1911-8074 |
Popis: | The main aim of this paper was to investigate the impact of bank characteristics on capital structure empirically. The study employed a panel data analysis, Pooled Mean Group (PMG) and Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) estimators were utilized, for the period spans between the years 2008 and 2018. Both the borrowing (leverage) ratio and equity ratio used in the analysis cover short-term deposits and long-term deposits as a fundamental determinant variable on the capital structure. The main findings confirm that the deposit ratio has a positive relationship with the size of the bank. In other words, big banks use more foreign sources than small banks to use the tax shield advantage. At the same time, a percentage increase in bank size and liquidity ratio enhance the bank deposit rate by 0.0068% and 0.479%, respectively, in the long-run, while a percentage change in interest income coverage will reduce the bank deposit rate by 0.004% in the long-run. Meanwhile, the significant causal relationship of growth rate with the bank deposit rate could not be established. In addition, the short-run coefficients of the variables reveal that size, interest coverage, and liquidity have a positive and significant causal relationship with bank deposit rate in the short-run. The findings of the study are in line with the results of capital structure theories, especially the hierarchy theory and balancing theory. |
Databáze: | OpenAIRE |
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