Determinants of capital structure decisions among publicly listed Islamic banks
This research aims to examine bank specific, market and regulatory determinants of leverage and capital structure based on a panel data of publicly listed Islamic banks in 12 countries over the period 2008-2017. Apart from testing standard corporate finance parameters using both OLS and M-Estimat...
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| Format: | Article |
| Language: | English English |
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Growing Science
2019
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| Online Access: | http://irep.iium.edu.my/79813/ http://irep.iium.edu.my/79813/1/79813_Determinants%20of%20capital%20structure%20decisions_article.pdf http://irep.iium.edu.my/79813/2/79813_Determinants%20of%20capital%20structure%20decisions_scopus.pdf |
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| author | Khokher, Zahid ur Rehman Syed Jaafar Alhabshi, Syed Musa |
| author_facet | Khokher, Zahid ur Rehman Syed Jaafar Alhabshi, Syed Musa |
| author_sort | Khokher, Zahid ur Rehman |
| building | IIUM Repository |
| collection | Online Access |
| description | This research aims to examine bank specific, market and regulatory determinants of leverage and
capital structure based on a panel data of publicly listed Islamic banks in 12 countries over the
period 2008-2017. Apart from testing standard corporate finance parameters using both OLS and
M-Estimators, this study adds several idiosyncratic and regulatory environment related determinants of leverage unique to Islamic banks. The significance of potential determinants is tested for
market and book leverage as well as newly introduced ‘Islamic banking leverage’. Overall, the
results show that Islamic banks with higher growth opportunities, tangibility, low profitability and
low risk are likely to have a high leverage. Similarly, the findings suggest important role played by
debt market conditions, share of investment accounts and regulatory environment in such decisions,
providing an evidence of the significance of trade-off and pecking order theory in capital structure
in Islamic banks. The results are more robust for market and Islamic banking leverage, rather than
book leverage. The findings offer insights to regulators, standard setters and especially Islamic
banks regarding parameters to strengthen their capital, enhance resilience and thus contribute to the
stability of relevant financial. This paper is among the few extant studies that focus on listed Islamic
banks and tests determinants based on stock market data. |
| first_indexed | 2025-11-14T17:47:22Z |
| format | Article |
| id | iium-79813 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English |
| last_indexed | 2025-11-14T17:47:22Z |
| publishDate | 2019 |
| publisher | Growing Science |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-798132020-06-25T02:44:54Z http://irep.iium.edu.my/79813/ Determinants of capital structure decisions among publicly listed Islamic banks Khokher, Zahid ur Rehman Syed Jaafar Alhabshi, Syed Musa HG1501 Banking HG3368 Islamic Banking and Finance This research aims to examine bank specific, market and regulatory determinants of leverage and capital structure based on a panel data of publicly listed Islamic banks in 12 countries over the period 2008-2017. Apart from testing standard corporate finance parameters using both OLS and M-Estimators, this study adds several idiosyncratic and regulatory environment related determinants of leverage unique to Islamic banks. The significance of potential determinants is tested for market and book leverage as well as newly introduced ‘Islamic banking leverage’. Overall, the results show that Islamic banks with higher growth opportunities, tangibility, low profitability and low risk are likely to have a high leverage. Similarly, the findings suggest important role played by debt market conditions, share of investment accounts and regulatory environment in such decisions, providing an evidence of the significance of trade-off and pecking order theory in capital structure in Islamic banks. The results are more robust for market and Islamic banking leverage, rather than book leverage. The findings offer insights to regulators, standard setters and especially Islamic banks regarding parameters to strengthen their capital, enhance resilience and thus contribute to the stability of relevant financial. This paper is among the few extant studies that focus on listed Islamic banks and tests determinants based on stock market data. Growing Science 2019 Article NonPeerReviewed application/pdf en http://irep.iium.edu.my/79813/1/79813_Determinants%20of%20capital%20structure%20decisions_article.pdf application/pdf en http://irep.iium.edu.my/79813/2/79813_Determinants%20of%20capital%20structure%20decisions_scopus.pdf Khokher, Zahid ur Rehman and Syed Jaafar Alhabshi, Syed Musa (2019) Determinants of capital structure decisions among publicly listed Islamic banks. Management Science Letters, 9 (10). pp. 1577-1598. ISSN 1923-9335 E-ISSN 1923-9343 http://www.growingscience.com/msl/Vol9/msl_2019_141.pdf 10.5267/j.msl.2019.5.028 |
| spellingShingle | HG1501 Banking HG3368 Islamic Banking and Finance Khokher, Zahid ur Rehman Syed Jaafar Alhabshi, Syed Musa Determinants of capital structure decisions among publicly listed Islamic banks |
| title | Determinants of capital structure decisions among publicly listed Islamic banks |
| title_full | Determinants of capital structure decisions among publicly listed Islamic banks |
| title_fullStr | Determinants of capital structure decisions among publicly listed Islamic banks |
| title_full_unstemmed | Determinants of capital structure decisions among publicly listed Islamic banks |
| title_short | Determinants of capital structure decisions among publicly listed Islamic banks |
| title_sort | determinants of capital structure decisions among publicly listed islamic banks |
| topic | HG1501 Banking HG3368 Islamic Banking and Finance |
| url | http://irep.iium.edu.my/79813/ http://irep.iium.edu.my/79813/ http://irep.iium.edu.my/79813/ http://irep.iium.edu.my/79813/1/79813_Determinants%20of%20capital%20structure%20decisions_article.pdf http://irep.iium.edu.my/79813/2/79813_Determinants%20of%20capital%20structure%20decisions_scopus.pdf |