Literature Review for Research Proposal
Author(s) Title
Mehar, R.M. Analysis of the Capital Structure
and Banks Performance: Evidence
from Pakistan
Anarfo, B.E.(2015) Capital Structure And
Bank Performance –
Evidence From Sub-
Sahara Africa
Uremadu, S.O. & The Impact of Capital
Reference
Mehar M.R. (2018) Analysis of
the Capital Structure and Banks
Performance: Evidence from
Pakistan. Journal of Business &
Financial Affairs. 7 (2) pp. 2-5:
343. doi: 10.4172/2167-
0234.1000343
Anarfo, B.E.(2015). Capital
Structure And Bank Performance
– Evidence From Sub-Sahara
Africa. European Journal of
Accounting Auditing and Finance
Research. 3 (3), pp. 1-20.
Uremadu, S.O. & Onyekachi, O.
Methodology Conclusion
Regression Analysis As indicated by the
with: unmistakable
 Spread ratio, outcomes the private
EPS, ROA as segment banks are the
dependent preferable entertainers
variables over people in general
 TDE, LTDE, STDE division banks. The
as independent measure reason is that
variables the general population
area banks confront
part of snags in key
control and arranging
due degenerate
administration and
administration.
Panel data using ROA, This implies that
ROE and net interest capital structure do
margin (NIM) as not impact banks
variables. performance that is,
banks’ performance
does not depend on
their capital structure
but rather it is capital
structure that depends
on banks’
performance from the
previous analysis of
the determinants of
capital structure.
The study used The study, therefore,
Onyekachi, O. Structure on Corporate (2018). The Impact of Capital
(2018) Performance in Nigeria: A Structure on Corporate
Quantitative Study of Performance in Nigeria: A
Consumer Goods Sector Quantitative Study of Consumer
Goods Sector. Current
Investigation in Agriculture and
Current Research, 5(4), pp.697-
705. Doi:
10.32474/CIACR.2018.05.00021
7.
Nwude, E.C. &
Anyalechi, C.K. Nwude, E.C. & Anyalechi, C.K.
(2018) (2018). Impact of Capital
Structure on Performance of
Commercial Banks in Nigeria.
International Journal of
Economics and Financial Issues.
8 (2), pp. 298-303.
multiple regression of concluded that,
ordinary least square capital structure
(OLS) method of represented by long-
analysis. term debt to total
assets (LTDTA) ratio
and total debt to
equity capital (TDTEC)
ratio were not major
determinants of a
corporate firm’s
performance in
Nigeria; hence, firms
should finance their
business activities
with retained
earnings and use
corporate debt as a
last option which is in
line with the pecking
order theory.
A sample of 10 out of The study reveals that
23 banks was debt financing
purposively selected negatively and
based on their significantly
performance in the influence return on
stock market. Panel asset of commercial
data was sourced from banks in Nigeria,
the financial statement Equity finance exert
of these 10 selected positive and non-
commercial banks over significant influence
the 14 year- period, on return on asset,
spanning from 2000 to while debt-equity
 2013. Two static ratio had negative and
models were employed non-significant
in the study in which influence on return on
debt financing, equity asset.
financing, and debt-
equity ratio stand as
measures of capital
structure, while return
on asset and return on
equity were used as
corresponding
measures of
organizational
performance. Dynamic
model employed in the
study captured capital
structure with debt-
equity ratio while
organization
performance was
captured by return on
asset. Techniques used
in the study included
the pooled OLS
estimator, fixed effect
estimator and random
effect estimator
analysis. The model
was estimated at 5%
significant level.
Gebremichael, The Impact of Capital Gebremichael, G.G. (2016). The Panel data from Capital
G.G. (2016). Structure on Profitability Impact of Capital Structure on audited financial structure/Leverage as
of Commercial Bank of Profitability of Commercial statements particularly measured by debt to
 Ethiopia Bank of Ethiopia. Journal of
Poverty, Investment and
Development. 28, pp. 17-36.
Marandu, K.R. Capital Structure And Marandu, K.R. & Sibindi, B.A.
& Sibindi, B.A. Profitability: An (2016). Capital Structure And
(2016) Empirical Study Of South Profitability: An
African Banks Empirical Study Of South
African Banks. Journal of
Corporate Ownership & Control.
14, (1), pp. 8-19.
balance sheets and asset ratio had
income statements of a statistically
sample of eight banks significant negative
over the time period relationship with
from 2002-2013. The profitability, which
collected data were was in line with prior
analyzed by employing expectation. This
a fixed effect model result also supports
using statistical the pecking order
package ‘SPSS’. theory and prefers
using internal finance
before raising debt or
equity.
Multiple linear
regressions on time There is a significant
series data of big relationship between
South African banks profitability and the
for the period 2002 to determinants of
2013 using ROA as capital. Empirical
dependent variable and evidence support a
capital adequacy, size, positive association
deposits and credit risk between ROA (the
as independent profitability measure)
variables. and capital as well as
the size variables on
one hand and on
the other hand the
relationship between
ROA and the deposits
saved as well as credit
risk variables seem to
be sensitive to the
business cycles
Hafeez, Impact of Capital Hafeez, M.M. et al. (2018). Regression There is a positive
Structure on Islamic Impact of Capital Structure on analysis.ER, EM, DR and significant
M.M. et al.
Banks Performance: Islamic Banks Performance: and DE treated as relation between
(2018).
(Evidence from Asian (Evidence from Asian Country). independent variables Equity Multiplier and
Country) Global Journal of Management and ROA and ROE as Debt Ratio with
and Business Research.18, (3). dependent variables Returns on Assets
using E-view Software while Equity Ratio
for analysis of the time has negative and
serious data over the significant relation
period of 2007 to with Returns on
2016. Assets.
Subramanian, Subramanian, V.A. & Correlation analysis Debt equity ratio is
V.A. & Capital Structure and Its Thuraisingnam, R. (2013). was used to identify positively associated
Thuraisingnam, Impact on Profitability: Capital Structure and Its Impact relationship between with all profitability
R. (2013). Evidence from Sri Lankan on Profitability: Evidence from capital structure and ratios such as Return
Listed Banks Sri Lankan Listed Banks. profitability while on equity, Return on
International Journal of Regression was used to capital employed and
Research in Commerce, find out the impact of Net interest margin.
Economics & Management. 3, capital structure on Total debt was found
(12), pp. 10-14. profitability using to be significant in
SPSS package determining return on
(Version 16.0) data capital employed in
analysis. Data was the banking industry
collected using panel of Sri Lanka. Debt to
data from financial total funds ratio is
statements of ten banks positively associated
for the periods 2008- with ROE and ROCE
2012. and it is significantly
correlated to ROCE;
but negatively
correlated with net
interest margin.
Abeywardhana, Capital Structure and Dilrukshi Krishanthi Yapa This study depends on The results of this study
D.K.Y. (2015) Profitability: Abeywardhana (2015). Capital the dynamic model to
An Empirical Analysis of Structure and Profitability: An examine the relationship
SMEs in the UK Empirical Analysis of SMEs in between capital
the UK. Journal of Emerging structure and
profitability. Return on
Issues in Economics, Finance and
assets (ROA) and
Banking (JEIEFB) An Online
Return on capital
International Research Journal. 4
employed (ROCE) are
(2), pp. 1-14. used as dependent
variables for measuring
firms’ financial
performance, while a
set of independent
variables with
difference expected
signs were used to
measure the effect on
firms’ profitability
through the literature
review.
This study employed
Serwadda, I. Determinants Of Serwadda Isah. (2018). an analytical approach
have shown that the
capital structure of the
firm has a significant
influence on the
profitability of SMEs in
the UK. Especially long
term debt to total
assets ratio negatively
related with the
profitability and this is
an indication that SMEs
are averse to use more
equity because of the
fear of losing the
control and therefore
employ more debt than
in the capital structure
that would be
appropriate. To avoid
agency issues and the
problems face in
acquiring equity SMEs
increase the usage of
debt. Future research
should investigate
generalizations of the
findings beyond the UK,
incorporating qualitative
factors such as manager’s
perception to determine
the relationship between
capital structure and
profitability of the firm.
The study concludes
that bank size and
(2018) Commercial Banks’ Determinants of Commercial
Profitability. Evidence Banks’ Profitability. Evidence
From Hungary from Hungary. Acta Universitatis
Agriculturae et Silviculturae
Mendelianae Brunensis, 66(5):
1325 – 1335.
by using a strongly asset quality are
balanced panel data for bank-specific
twenty-six Hungarian (internal) factors that
commercial banks for have the most
the period 2000 – 2015 significant impact on
operating in the commercial banks’
Hungarian banking performance in
sector to achieve the Hungary for the
intended objectives. period under
Data from the Bank investigation.
scope database Meanwhile, non-
together with performing loans,
published annual overhead costs and
income financial liquidity had a
statements as well negative effect on the
balance sheets of financial performance
commercial banks in of commercial banks.
Hungary for a sixteen This meant that any
year period ranging increase in non-
from 2000 – 2015 performing loans,
resulting into a total of overhead costs and
four hundred sixteen increased liquid assets
year bank observations reduces profitability.
to approximate the Bank size had a
relevant ratios and positive impact on
coefficients. profitability. This just
meant that an increase
in the level of bank
size would increase
the profitability of
commercial banks.
Ishuza, W. E. The Effect Of Financial This research It has been found that
(2015) Leverage On Commercial Ishuza Witness Edson (2015). The employed a the profit made to
Banks’ Profitability In Effect of Financial Leverage On quantitative research stockholder is not
Tanzania Commercial Banks’ Profitability In design to examine the effect with the level
Tanzania. (use URL). relationship between of debt of the bank
variables and in this but the level of the
research the variables debt decreases the
were financial leverage performance
and profitability measured by ROA.
where dependent and
independent variables
have been identified
(Kothari, 2004)
The all data are This study reveals a
Chong-Chuo Relationship Between Chang, C.C., Batmunkh, M.U., collected from the significantly negative
Chang, et al Capital Structure And Wong, W.K., & Jargalsaikhan, Compustat Global relationship between
(2019) Profitability: Evidence M. (2019). Relationship between Vantage database. The profitability and
From Four Asian Tigers capital structure and profitability: analysis in this study leverage, indicating
Evidence from Four Asian involves three statistical that an increase in
Tigers. Journal of Management techniques: descriptive profitability is
Information and Decision statistics, correlation
associated with a
Sciences, 22(2), 54-65 coefficients and
decrease in leverage.
regression analysis. The
final sample comprises Thus, the higher the
4 countries, 5,112 firms profitability, the lower
and 46,301 firm-year the leverage of the
observations. firm becomes.
Moreover, profitability
has a significantly
negative effect on the
leverage of firms in
each country. Growth
and leverage show a
significantly positive
 relationship in Taiwan,
Korea and Hong Kong.
Size has a significantly
positive relationship
with leverage in each
country. Tangibility is
significantly correlated
with leverage in each
country, but tangibility
and leverage move in
opposite directions.
Tran Binh Dai The Relationship of the Tran Binh Dai (2017). The This paper applies an The result illustrates
(2017) Capital Structure and Relationship of the Capital unbalanced panel data that the capital
Financial Performance: Structure and Financial of quarterly financial structure of banks in
Empirical Performance: Empirical Evidence information of all Thailand is
Evidence of Listed Banks of Listed Banks in Thailand. listed banks in statistically adverse
in Thailand European Journal of Accounting, Thailand from 1997 to significance with the
Auditing and Finance Research, 5 2016. After the crisis financial
(5), pp. 18-28. of 1997, many performance. Thus, it
regulations in implies that pecking
controlling banks have order theory is valid
been applied. Thus, the in this sample, banks
number of banks varies prioritize their
over these years in internal generated
unbalanced panel data. funds which are their
Moreover, we only use retain earnings first
the separated financial and if this source of
statements because the finance is used up,
consolidated reports they will use the debt
may include some capital. Thus, this
subsidiaries such as paper suggests that
real estate or securities the more efficient
companies which may banks use less debt
 cause bias in term of (more equity). The
the nature of banks. result is also
The data is collected confirmed by
from Thailand Stock robustness
Exchange website. examination.
Yhlas Sovbetov (2013). The research is In this research, the
Yhlas Sovbetov Relationship Between Relationship between Capital founded on the author has proved his
(2013) Capital Structure & Structure & Profitability: quantitative approach hypotheses that
Profitability Evidence from UK Banking where the data were generally states the
- Evidence From UK Industry over the Period of 2007- compromised from the capital structure of
Banking Industry Over 2012. Cardiff Metropolitan annual reports of the the banks in UK has a
The Period Of 2007-2012. University. relating banks through strong and negative
the period of 2007- impact on its
2012 using regression profitability by
analysis model. analyzing recent six
years data of top six
banks in industry.
Odusanya, I.A. Determinants of firm Odusanya, Ibrahim Abidemi; Yinusa, The data used in the The study revealed
et al (2018) Profitability in Nigeria: Olumuyiwa Ganiyu; Ilo, Bamidele study covered one that lagged
M. (2018) : Determinants of firm profitability exerted
Evidence from dynamic Profitability in Nigeria: Evidence from hundred and fourteen
panel models. dynamic panel models, (114) non-financial positively and
SPOUDAI - Journal of Economics and firms listed on the significantly on
Business, ISSN 2241-424X, University Nigerian Stock contemporaneous
of Piraeus,
Exchange (NSE). profitability of firms in
Piraeus, Vol. 68, Iss. 1, pp. 43-58 Nigeria. It was also
Baseline model and
found that short-term
Dynamic model of firm
leverage, inflation rate,
profitability was used in interest rate and
analyzing the data financial risk have
collected from the significant negative
Annual reports of the effects on firm
sampled companies profitability during the
obtained from the NSE sampled period.
and the Fact Books of
the NSE covering the
period 1998 to 2012.