| Title : | Capital structure choice of commercial bank around South Asia: the role of country specific determinants with special reference to Nepal | | Material Type: | printed text | | Authors: | Arjun Gautam, Author | | Publication Date: | 2016 | | Pagination: | 96p. | | Size: | GRP/Thesis | | Accompanying material: | 6/B | | Languages : | English | | Descriptors: | Capital structure
| | Class number: | 658.152 | | Abstract: | Researchers over the last decades believe that there is a relationship between macroeconomic condition of a country and capital structure choice of the firm. There are many studies published to examine this relationship. The relationship between macroeconomic condition of a country and capital structure choice of the firm are studied extensively by several researchers. In regards to the relationship between macroeconomic condition of a country and capital structure choice of the firm, researchers found different results. Some other the scholars’ stated that macroeconomic factors have negative relationship with capital structure choice of the firm. Meanwhile other researcher indicate that the nonlinear positive relationship between macroeconomic condition of a country and capital structure choice of the firm.
This study investigates the impact of country specific variables (macroeconomic) on capital structure choice of commercial banks of south Asian countries. The study has employed descriptive and causal comparative research design to deal with the fundamental issues associated with the impact of macroeconomic condition of a country on capital structure choice of the commercial banks in context of south Asian countries. The study is based on secondary data. The variables used in the study are categorized into country specific variables (inflation, ratio of stock market capitalization to GDP, GDP growth rate, discount rate on 91 days T-bill and ratio of quasi money supply to GDP) as independent variables and capital structure as dependent variables i.e. total debt ratio, long term debt ratio and short term debt ratio. Similarly this study covers data on dependent variables and independent variables for 13 years ranging for year 2001 to 2013.
The study reveals that macro-economic variable; inflation has negative relationship with total debt ratio of commercial banks of all four sample countries except commercial banks of Sri-Lanka. It means that as the inflation rate in a country increases the debt ratio of the commercial banks becomes weaker and vice versa. Similarly, the inflation has positive relation with long term debt ratio of commercial banks of Nepal and Pakistan but has negative relation with long term debt ratio of India, Sri-Lanka and Bhutan. For positive relation it advocates that as the inflation increases the long term leverage of the banks increases and vice versa. The GDP growth rate has negative relation with total debt ratio of commercial banks of all four sample countries except that of Pakistan, which means that when the country is economically developed, people prefer making investment in the various projects carried out by government as well as private sectors rather than depositing in banks for fixed period of time thus the long term debt ratio of commercial banks also decreases. The study revealed that ratio of quasi money supply (M2) has been found to be significant factor affecting the total debt ratio and short term debt ratio of Nepalese commercial bank. On the other hand none of macroeconomic factors are found to be significant factor affecting the long term debt ratio of Nepalese commercial bank. The study advocates that ratio of stock market capitalization and ratio of quasi money supply (M2) has been found to be significant factor affecting the total debt ratio of Indian commercial bank. Similarly, inflation, 91 days T-bill interest rate and ratio of quasi money supply to GDP are found to be significant factor affecting the long term debt ratio of Indian commercial bank. Whereas, only GDP growth rate has been found to be significant factor affecting the short term debt ratio of Indian commercial bank.
The study further reveals that GDP growth rate and ratio of market capitalization to GDP has been found to be significant factor affecting the total debt ratio, long term debt ratio and short term debt ratio of Sri-Lankan commercial bank. Inflation, GDP growth 91 days T-bill interest rate and ratio of quasi money supply (M2) has been found to be significant factor affecting the total debt ratio of Pakistani commercial bank. Whereas, none of the macroeconomic factors are found to be significant factor affecting the long term debt ratio. On the other hand inflation, 91 days T-bill interest rate and ratio of quasi money supply to GDP has been found to be significant factor affecting the short term debt ratio of Pakistani commercial bank. Ratio of quasi money supply (M2) has been found to be significant factor affecting the total debt ratio of Bhutanese commercial bank. Similarly, inflation, ratio of stock market capitalization to GDP and ratio of quasi money supply to GDP are found to be significant factor affecting the long term debt ratio of Bhutanese commercial bank. Whereas, only ratio of quasi money supply to GDP has been found to be significant factor affecting the short term debt ratio of Bhutanese commercial bank.
The study remains enough ground for the future researchers in the same topic. The future studies can be done by using both primary and secondary data so that along with country specific variables, firm specific factors can be used to get more precise result. In addition to commercial banks, the future study may include other financial and non financial sector such as development bank, finance companies, hotel and service industries, manufacturing industries, micro finance, insurance companies, hydro power companies etc to make such research work more reliable and valid. The results are thus not representative of all sectors of the economy. Hence, future studies can include significant number of observations from the sectors other than banks and financial institutions.
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Capital structure choice of commercial bank around South Asia: the role of country specific determinants with special reference to Nepal [printed text] / Arjun Gautam, Author . - 2016 . - 96p. ; GRP/Thesis + 6/B. Languages : English | Descriptors: | Capital structure
| | Class number: | 658.152 | | Abstract: | Researchers over the last decades believe that there is a relationship between macroeconomic condition of a country and capital structure choice of the firm. There are many studies published to examine this relationship. The relationship between macroeconomic condition of a country and capital structure choice of the firm are studied extensively by several researchers. In regards to the relationship between macroeconomic condition of a country and capital structure choice of the firm, researchers found different results. Some other the scholars’ stated that macroeconomic factors have negative relationship with capital structure choice of the firm. Meanwhile other researcher indicate that the nonlinear positive relationship between macroeconomic condition of a country and capital structure choice of the firm.
This study investigates the impact of country specific variables (macroeconomic) on capital structure choice of commercial banks of south Asian countries. The study has employed descriptive and causal comparative research design to deal with the fundamental issues associated with the impact of macroeconomic condition of a country on capital structure choice of the commercial banks in context of south Asian countries. The study is based on secondary data. The variables used in the study are categorized into country specific variables (inflation, ratio of stock market capitalization to GDP, GDP growth rate, discount rate on 91 days T-bill and ratio of quasi money supply to GDP) as independent variables and capital structure as dependent variables i.e. total debt ratio, long term debt ratio and short term debt ratio. Similarly this study covers data on dependent variables and independent variables for 13 years ranging for year 2001 to 2013.
The study reveals that macro-economic variable; inflation has negative relationship with total debt ratio of commercial banks of all four sample countries except commercial banks of Sri-Lanka. It means that as the inflation rate in a country increases the debt ratio of the commercial banks becomes weaker and vice versa. Similarly, the inflation has positive relation with long term debt ratio of commercial banks of Nepal and Pakistan but has negative relation with long term debt ratio of India, Sri-Lanka and Bhutan. For positive relation it advocates that as the inflation increases the long term leverage of the banks increases and vice versa. The GDP growth rate has negative relation with total debt ratio of commercial banks of all four sample countries except that of Pakistan, which means that when the country is economically developed, people prefer making investment in the various projects carried out by government as well as private sectors rather than depositing in banks for fixed period of time thus the long term debt ratio of commercial banks also decreases. The study revealed that ratio of quasi money supply (M2) has been found to be significant factor affecting the total debt ratio and short term debt ratio of Nepalese commercial bank. On the other hand none of macroeconomic factors are found to be significant factor affecting the long term debt ratio of Nepalese commercial bank. The study advocates that ratio of stock market capitalization and ratio of quasi money supply (M2) has been found to be significant factor affecting the total debt ratio of Indian commercial bank. Similarly, inflation, 91 days T-bill interest rate and ratio of quasi money supply to GDP are found to be significant factor affecting the long term debt ratio of Indian commercial bank. Whereas, only GDP growth rate has been found to be significant factor affecting the short term debt ratio of Indian commercial bank.
The study further reveals that GDP growth rate and ratio of market capitalization to GDP has been found to be significant factor affecting the total debt ratio, long term debt ratio and short term debt ratio of Sri-Lankan commercial bank. Inflation, GDP growth 91 days T-bill interest rate and ratio of quasi money supply (M2) has been found to be significant factor affecting the total debt ratio of Pakistani commercial bank. Whereas, none of the macroeconomic factors are found to be significant factor affecting the long term debt ratio. On the other hand inflation, 91 days T-bill interest rate and ratio of quasi money supply to GDP has been found to be significant factor affecting the short term debt ratio of Pakistani commercial bank. Ratio of quasi money supply (M2) has been found to be significant factor affecting the total debt ratio of Bhutanese commercial bank. Similarly, inflation, ratio of stock market capitalization to GDP and ratio of quasi money supply to GDP are found to be significant factor affecting the long term debt ratio of Bhutanese commercial bank. Whereas, only ratio of quasi money supply to GDP has been found to be significant factor affecting the short term debt ratio of Bhutanese commercial bank.
The study remains enough ground for the future researchers in the same topic. The future studies can be done by using both primary and secondary data so that along with country specific variables, firm specific factors can be used to get more precise result. In addition to commercial banks, the future study may include other financial and non financial sector such as development bank, finance companies, hotel and service industries, manufacturing industries, micro finance, insurance companies, hydro power companies etc to make such research work more reliable and valid. The results are thus not representative of all sectors of the economy. Hence, future studies can include significant number of observations from the sectors other than banks and financial institutions.
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