Journal of Administrative and Business Studies
Details
Journal ISSN: 2414-309X
Article DOI: https://doi.org/10.20474/jabs-3.3.5
Received: 15 April 2017
Accepted: 22 May 2017
Published: 30 June 2017
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  • Financial crisis and determinants of capital structure of investment banking sector in Pakistan

Ajab Khan Burki

Published online: 2017

Abstract

The aim of this paper is to add in the incumbent literature of capital structure by estimating the cap- ital structure’s determinants of investment banking sector of Pakistan for the period of 2004-11 and the effect of the βinancial crisis (2007-08) on these determinants in deciding debt to equity choice on the βirm level. This article utilizes the balanced panel econometric techniques for catering the said objectives. The previous works of notable scholars are thoroughly reviewed for capital structure. Similarly, the balanced panel econometric techniques are used for examining the implication of βinancial crisis on deciding for βirm’s βinancing. The effect is estimated by dividing the sample period into two parts: pre (2004-06) and post (2009-11) βinancial crisis. The outcomes suggest that determinants of capital structure are the same as utilized in the advanced economies. Besides, this paper entails a strong evidence of βinancial crisis’ effect on capital structure’s determinants in investment bank- ing sector of Pakistan. This paper produces a fresh outlook into determining the capital structure’s determinants from the perspective of investment banking sector of Pakistan. Secondly, this paper produces a valuable addition to the incumbent literature by determining the effect of the βinancial crisis on capital structure decision making based on the given determinants.