Empirical Investigation of Factors Affecting the Capital Structure of Islamic Banks (IBs): Evidence from Pakistan
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The study intends to find out the important factors that affect the capital structure of Islamic banks in Pakistan by applying the Generalized Least Square Regression (GLS) model. In this regard, the panel data from 2011 to 2019 of major Islamic banks were gathered through the financial statements of the Islamic banks. The leverage ratio was used as a dependent variable and profitability, liquidity, NDTS, Bank size, tax, solvency, growth, inflation rate and GDP were used as independent variables. The findings of the study show that the capital structure of the IBs has a positive and significant relationship with profitability, liquidity and NDTS while bank size, tax, solvency, inflation rate and GDP are negatively associated with the leverage ratio.
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