The Capital Structure of Banking Sector in Jordan

Walid Z. Siam, Husni A. Khrawish, Basem M. El-Hammoury


This study examined the capital structure of listed banking in Amman bourse (Amman Stock Exchange) in 2002. Using firm-level panel and data, the mean leverage ratios are calculated during the time period (1992-2001).
Based on the statistical analysis, it is found that the size of the bank (measured by total assets), retained earnings divided by total assets, liquidity ratio and the long and short - term debts are determinants of leverage.
Furthermore, it is found a positive relationship between bank's capital structure (leverage) and the age of the bank and the total assets associated with the retained earnings divided by total assets.
Also, this study found a negative relationship between the bank's capital structure (leverage) and the liquidity ratio associated with the long, short-term debts.
Finally, this study presented some results and recommendations that have been suggested which might lead to enhance and develop the role of banking sector in the process of developing.


Capital structure , Amman Stock Exchange , Leverage , Banking sector

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