KEY DETERMINANTS OF CAPITAL STRUCTURE: ■ BANKING SECTOR OF PAKISTAN

Abstract

Purpose The purpose of conducting this research paper is to measure the determining factor that effect the Capital structure of banking industry of Pakistan for the period of 2011-2018. This research paper also provide the examination of the model derived from the term structure of capital decision ofthe Pakistani banking sector over the period 2011-2018. Methodology/Approach & Design Different theoretical aspect of Capital structure has been reviewed in several different research papers in order to draw testable conclusion concern using the key factor of the Capital structure of the Banking sector of Pakistan. This study is done by using the secondary data of listed banks (Conventional banks, specialized banks, Islamic banks and foreign banks) on State bank of Pakistan websites during 2011-2018. While, correlation and regression analysis is used in the study in estimating the relationship between the variables. Findings The result of the research paper suggested Tangibility of Assets, Deposits and Growth are positive relationship and highly correlated with Capital structure. Whereas, profitability and Non debt taxes have significant and positive relationship with dependent variable. The finding of the studies are supported with prediction of the several theories discuss by past researchers. Capital structure model provides for understanding the financial behavior of the Pakistan banking industry for the year 2011 -2018.