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Factors Affecting Capital Structure Decisions of Banks: A Systematic Literature Review Evidence from Commercial Banks of Ethiopia

Received: 9 June 2023    Accepted: 27 June 2023    Published: 8 July 2023
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Abstract

The study intends to examine the literature on factors influencing capital structure decisions of commercial banks in Ethiopia in order to identify existing gaps and the degree of existing research in the subject, as well as to provide direction for future research. Due to a lack of studies for the stated review and access to the known database, the review was conducted utilizing eleven relevant and available scholarly papers that were published in any time period, primarily using open search engines and databases. To identify the articles, various key words were employed. The PRISMA framework was used to analyze the capital structure decisions study work. The review protocol outlined the inclusion and exclusion criteria. The descriptive analysis was performed based on different parameters to arrive at conclusions. The findings revealed that most of the variables of interest explored in the studies contradicted each other and the previous literature variables. The capital structure studies were conducted by considering few variables, and most of the studies were not cited. The findings regarding the theories supported by factors affecting the capital structure decisions of commercial banks in Ethiopia were contradictory and not justified. The banking literature still doesn't cover the capital structure of banks very much. There is currently a lack of clarity regarding how banks determine their capital structure and what variables affect their corporate financing behavior. Therefore, it is recommended that the concerned body conduct an in-depth study of the decisions banks make about their capital structure by identifying pertinent elements.

Published in International Journal of Finance and Banking Research (Volume 9, Issue 3)
DOI 10.11648/j.ijfbr.20230903.11
Page(s) 39-49
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Capital Structure, Banks, Ethiopia, Systematic Review, Trade off Theory, MM Theory, Agency Theory

References
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  • APA Style

    Tesfaye Eresso Gofe, Arega Seyoum Asfaw. (2023). Factors Affecting Capital Structure Decisions of Banks: A Systematic Literature Review Evidence from Commercial Banks of Ethiopia. International Journal of Finance and Banking Research, 9(3), 39-49. https://doi.org/10.11648/j.ijfbr.20230903.11

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    ACS Style

    Tesfaye Eresso Gofe; Arega Seyoum Asfaw. Factors Affecting Capital Structure Decisions of Banks: A Systematic Literature Review Evidence from Commercial Banks of Ethiopia. Int. J. Finance Bank. Res. 2023, 9(3), 39-49. doi: 10.11648/j.ijfbr.20230903.11

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    AMA Style

    Tesfaye Eresso Gofe, Arega Seyoum Asfaw. Factors Affecting Capital Structure Decisions of Banks: A Systematic Literature Review Evidence from Commercial Banks of Ethiopia. Int J Finance Bank Res. 2023;9(3):39-49. doi: 10.11648/j.ijfbr.20230903.11

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  • @article{10.11648/j.ijfbr.20230903.11,
      author = {Tesfaye Eresso Gofe and Arega Seyoum Asfaw},
      title = {Factors Affecting Capital Structure Decisions of Banks: A Systematic Literature Review Evidence from Commercial Banks of Ethiopia},
      journal = {International Journal of Finance and Banking Research},
      volume = {9},
      number = {3},
      pages = {39-49},
      doi = {10.11648/j.ijfbr.20230903.11},
      url = {https://doi.org/10.11648/j.ijfbr.20230903.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20230903.11},
      abstract = {The study intends to examine the literature on factors influencing capital structure decisions of commercial banks in Ethiopia in order to identify existing gaps and the degree of existing research in the subject, as well as to provide direction for future research. Due to a lack of studies for the stated review and access to the known database, the review was conducted utilizing eleven relevant and available scholarly papers that were published in any time period, primarily using open search engines and databases. To identify the articles, various key words were employed. The PRISMA framework was used to analyze the capital structure decisions study work. The review protocol outlined the inclusion and exclusion criteria. The descriptive analysis was performed based on different parameters to arrive at conclusions. The findings revealed that most of the variables of interest explored in the studies contradicted each other and the previous literature variables. The capital structure studies were conducted by considering few variables, and most of the studies were not cited. The findings regarding the theories supported by factors affecting the capital structure decisions of commercial banks in Ethiopia were contradictory and not justified. The banking literature still doesn't cover the capital structure of banks very much. There is currently a lack of clarity regarding how banks determine their capital structure and what variables affect their corporate financing behavior. Therefore, it is recommended that the concerned body conduct an in-depth study of the decisions banks make about their capital structure by identifying pertinent elements.},
     year = {2023}
    }
    

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    T1  - Factors Affecting Capital Structure Decisions of Banks: A Systematic Literature Review Evidence from Commercial Banks of Ethiopia
    AU  - Tesfaye Eresso Gofe
    AU  - Arega Seyoum Asfaw
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    DO  - 10.11648/j.ijfbr.20230903.11
    T2  - International Journal of Finance and Banking Research
    JF  - International Journal of Finance and Banking Research
    JO  - International Journal of Finance and Banking Research
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    PB  - Science Publishing Group
    SN  - 2472-2278
    UR  - https://doi.org/10.11648/j.ijfbr.20230903.11
    AB  - The study intends to examine the literature on factors influencing capital structure decisions of commercial banks in Ethiopia in order to identify existing gaps and the degree of existing research in the subject, as well as to provide direction for future research. Due to a lack of studies for the stated review and access to the known database, the review was conducted utilizing eleven relevant and available scholarly papers that were published in any time period, primarily using open search engines and databases. To identify the articles, various key words were employed. The PRISMA framework was used to analyze the capital structure decisions study work. The review protocol outlined the inclusion and exclusion criteria. The descriptive analysis was performed based on different parameters to arrive at conclusions. The findings revealed that most of the variables of interest explored in the studies contradicted each other and the previous literature variables. The capital structure studies were conducted by considering few variables, and most of the studies were not cited. The findings regarding the theories supported by factors affecting the capital structure decisions of commercial banks in Ethiopia were contradictory and not justified. The banking literature still doesn't cover the capital structure of banks very much. There is currently a lack of clarity regarding how banks determine their capital structure and what variables affect their corporate financing behavior. Therefore, it is recommended that the concerned body conduct an in-depth study of the decisions banks make about their capital structure by identifying pertinent elements.
    VL  - 9
    IS  - 3
    ER  - 

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Author Information
  • Department of Accounting and Finance, College of Business and Economics, Wollega University, Nekemte, Ethiopia

  • Department of Accounting and Finance, College of Business and Economics, Jimma University, Jimma, Ethiopia

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