THE DETERMINANTS of BANK CAPITAL STRUCTURE in the WORLD

D. V. Tran, M. K. Hassan, Andrea Paltrinieri, T. D. U. C. Nguyen

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

We examine the determinants of bank capital structure using a large sample of banks in the world. We find that banks determine their capital structure in much the same way as non-financial firms, except for growth opportunities. We also provide evidence that country-level factors, such as the legal system, bank-specific factors and economic conditions influence banks' capital decisions through their impacts on bankruptcy costs, agency costs, information asymmetry and liquidity creation. The results show that, besides the direct effects, there are indirect impacts of country-level factors on the decision of bank capital. Our results have potential policy implications for the on-going regulatory reform.
Original languageEnglish
Pages (from-to)1457-1489
Number of pages33
JournalTHE SINGAPORE ECONOMIC REVIEW
Volume65
DOIs
Publication statusPublished - 2020

Keywords

  • Bank
  • capital structure
  • leverage
  • regulation
  • risk

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