Title: The impact of firm-specific determinants, external factors and voluntary disclosure on capital structure: an empirical analysis of Islamic banks in Yemen

Authors: Eissa A. Al-Homaidi; Mosab I. Tabash; Borhan Omar Ahmed Al-Dalaien; Amgad S.D. Khaled; Fatehi Almugari

Addresses: Faculty of Businesses, Al-Rowad University, Taiz, Yemen ' College of Business, Al Ain University, UAE ' Department of Accounting, Amman Arab University, Jordan ' Faculty of Management, Department of Management Information System, Al-Rowad University, Yemen ' Faculty of Businesses, Ibb University, Ibb, Yemen

Abstract: The purpose of this paper is to examine the impact of firm-specific features, external factors, and voluntary disclosure on capital structure of three Islamic banks in Yemen. The capital structure measured by banks' leverage (LEV) was considered a dependent variable that worked against firm-specific determinants, macroeconomic factors, and voluntary disclosure. The results indicated that voluntary disclosure has a significant influence on capital structure. The results indicated that among the firm-specific variables, assets-in-place, performance, and bank size are found to have a strongly significant influence on capital structure. With regard to macroeconomic variables, the results revealed that economic activity (GDP) and inflation rate are found to have an insignificant influence on capital structure. The research paper suggested that bankers recognise voluntary transparency in a manner that would enhance financial leverage for Islamic banks. To the researcher's best knowledge, there is no empirical evidence that examined the relationship between firm-specific characteristics, external factors, and voluntary disclosure with financial leverage in the annual reports of Islamic banks' working in Yemen.

Keywords: firm-specific factors; macroeconomic factors; voluntary disclosure; VDI; financial leverage; Islamic institutions; Yemen.

DOI: 10.1504/IJBSR.2022.125475

International Journal of Business and Systems Research, 2022 Vol.16 No.5/6, pp.599 - 623

Received: 29 Jun 2020
Accepted: 28 Oct 2020
Published online: 12 Sep 2022 *

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