The Nexus Between Capital Structure and Bank’s Specific Factors a Case Of Listed Banks in Tanzania
Loading...
Date
2022-07-17
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Multidisciplinary Research and Growth Evaluation
Abstract
This study aims to examine the influence of bank-specific factors namely taxation,
asset tangibility, profitability, and bank size on listed banks capital structure in
Tanzania from 2016 to 2020. The study used an explanatory research design to
determine the cause and effect relationship between the response variable and the four
explanatory variables of Tanzanian listed banks. The study's population included all
of the DSE's listed banks, with the researcher sampling seven of them. The test of
multiple linear regression was carried out and findings revealed the capital structure
of listed banks in Tanzania are affected by asset tangibility and tax as these two
explanatory variables were significant at 5% level. However, the study reveals that
profitability and bank size has no statistically significant impact on the capital
structure of listed banks in Tanzania. This study is limited to seven listed banks at the
Dar es Salaam Stock of Exchange (DSE) over a five-year period (2016 to 2020). The
researcher makes several recommendations based on this premise. First, additional
research should be conducted on other banks that are not listed at DSE. Second, other
explanatory variables such as liquidity position, bank age, and sales growth potentials,
to name a few, can be used. Third, the scope of the study can be expanded in terms of
sampled units and time period covered. Lastly, listed banks should give consideration
to tax and asset tangibility when in determining their optimal capital structure.
Description
Keywords
Tanzania, Capital Structure, Listed Banks, Pecking Order Theory, Trade-off Theory