Capital structure and profitability: Panel data evidence of private banks in Ethiopia

Artikel

The paper primarily studied the empirical relationship between capital structure, as measured by total and short-term debt ratios, and profitability of private banks in Ethiopia, for the period 2013/14 to 2018/19, using panel fixed effects. A survey of 16 private banks are included in the study. Based on the regression analysis results, capital structure variables and some bank-specific characteristics explain a substantial part of the variations in bank profitability. Higher profitability measures of ROA and net interest margin tend to be associated with relatively higher total and short-term debt ratios, loan to deposit ratios, and credit risks. Besides, older banks are in a better position than younger counterparts in terms of profitability. The impact of size is found to be significantly negative, at least for the ROA model, implying that Ethiopian private banks are operating below their optimal capacity. Mixed results were found pertaining the coefficient estimates of cos-income ratio and employee productivity.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Cogent Economics & Finance ; ISSN: 2332-2039 ; Volume: 9 ; Year: 2021 ; Issue: 1 ; Pages: 1.24-

Classification and Topics

• Classification: Wirtschaft
• Subject: Capital Structure ; Fixed Effects ; Panel Data ; Private Banks ; Profitability

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ayalew, Zemenu Amare
• Event: Veröffentlichung
• (who): Taylor & Francis
• (where): Abingdon
• (when): 2021

Further information

• DOI: doi:10.1080/23322039.2021.1953736
• Handle: http://hdl.handle.net/10419/270123
• Last update: 10.03.2025, 11:42 AM CET