Title: The determinants of capital structure of listed banks in Jordan: panel data analysis

Authors: Ali Mustafa Abdullah Al-Qudah

Addresses: Department of Finance and Business Economics, Faculty of Finance and Business Administration, Al al-Bayt University, P.O. Box 130040, Mafraq 25113, Jordan

Abstract: This study examines the determinants of capital structure of banks in Jordan by using a sample of 15 listed banks through the period 2006 to 2010. Panel data analysis is employed to determine the determinants of capital structure of banks in Jordan. The results show that size has a positive and significant impact on total liabilities to equity ratio, book leverage and market leverage while it has a positive insignificant impact on deposit leverage and non-deposit leverage. The results also show that market to book ratio has a positive and significant impact on all study leverage measures except non-deposit leverage. Profitability has a mixed impact, since it has a positive significant impact on non-deposit leverage, positive insignificant impact on book leverage and market leverage, and negative significant impact on deposit leverage and total liabilities to equity ratio. The finding also reveal that tangibility is a good determinant of non-deposit leverage and total liabilities to equity ratio and banks in Jordan funded 70% of its assets by customers' deposits.

Keywords: capital structure determinants; banks; leverage; Jordan; banking industry; panel data.

DOI: 10.1504/IJEBR.2014.063940

International Journal of Economics and Business Research, 2014 Vol.8 No.1, pp.36 - 46

Received: 15 Apr 2013
Accepted: 10 Jun 2013
Published online: 29 Aug 2014 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article