Capital structure and its major determinants: evidence from banking sector of Pakistan

The rationale of the study is to investigate the major determinants of debt to equity mixture in banking sector of Pakistan over a period of study from the year 2003 to 2013. Present study analysis is focusing on major capital structure determinants by conducting the multiple regression analysis in order to find out the major explanatory variables. Key findings of the study indicate that various internal (bank specific) and external (industry specific) factors are contributing towards the ultimate determination of leverage decision of the firms over the period of the study. Size of the firm, return on assets (ROA), return on equity (ROE) and fixed asset tangibility (FAT) are the major determinants of leverage decision. Contemporary analysis is primarily contributing in the existing body of literature which will be very much beneficial in the overall research analysis.