Title: An empirical analysis on factors affecting listed banking companies' leverage in Bangladesh

Authors: Repon Miah; Md. Abdur Rouf; Samsul Alam

Addresses: Department of Business Administration, Daffodil International University, Daffodil Smart City, Ashulia, Dhaka, Bangladesh ' Department of Business Administration, Daffodil International University, Daffodil Smart City, Ashulia, Dhaka, Bangladesh ' Department of Management Information Systems, Begum Rokeya University, Rangpur – 5404, Bangladesh

Abstract: The study intended to determine the characteristics of Bangladeshi listed banking companies return on assets (ROA), total assets (TA), return on sales (ROS), board size (BSIZ), independent director (IND), separation of chief executive officer (SCEO), age, and its influence on these banks' leverage. For a total 150 annual reports over a period of five years of the Dhaka Stock Exchange (DSE) enlisted banks were selected as the sample in this study, which is analysed using content analysis technique. The economic model fits with the data that have been used for evaluating the effect of experimental variables on the measured variable termed as leverage. Among the factors analysed, it was found that two factors have a significant relationship affecting the leverage of banking companies. The results of this study found from regression models show that ROA is positively and significantly related to the leverage of the banking companies. On the other hand, ROS and INDs are related to the leverage of banking entities negatively and significantly. Thus, the study shows that ROA positively and significantly influences banking companies' leverage decisions. Conversely, the banking companies' leverage decision is influenced by ROS both negatively and significantly.

Keywords: bank characteristics; financial leverage; return on assets; total assets; return on sales; age; Bangladesh.

DOI: 10.1504/IJBIR.2025.148402

International Journal of Business Innovation and Research, 2025 Vol.38 No.1, pp.90 - 104

Received: 30 Jun 2022
Accepted: 13 Aug 2022
Published online: 04 Sep 2025 *

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