The determinant of African banks’ capital structure: Basel III Accord or bank-specific factors?
Journal of Economic and Financial Sciences
| Field | Value | |
| Title | The determinant of African banks’ capital structure: Basel III Accord or bank-specific factors? | |
| Creator | Obadire, Ayodeji M. Moyo, Vusani Munzhelele, Ntungufhadzeni F. | |
| Description | Orientation: The decision to have an optimum mix of capital structure is an issue of concern for financial service firms as much as other firms.Research purpose: The study investigated the impact of the Basel III regulatory requirements and other bank-specific factors on African banks’ capital structure and ascertained which of these factors ultimately determines the capital structure decision.Motivation for the study: There is limited evidence of study conducted on banks’ capital structure determinants within the Basel III Accord framework in Africa.Research approach/design and method: This study employed panel data drawn from 45 listed banks from 6 African nations. The panel data regression model was fitted with the system generalised moment methods estimator.Main findings: The findings revealed that within a similar economic condition in the sampled African nations, the Basel III minimum capital requirements, bank risk and size play the most important role in shaping the observed capital structure decisions of African banks.Practical/managerial implications: The regulators including central and reserve banks of the sampled African nation, and CEOs should keep their leverage ratio within the Basel III leverage ratio threshold to monitor and curb the build-up of excess leverage and also pay significant attention to the minimum capital requirements, bank risk and size in order to have an optimum capital mix.Contribution/value add: The Basel III Accord has significant importance in the financing decisions of African banks as much as the bank-specific factors. | |
| Publisher | AOSIS | |
| Date | 2022-10-26 | |
| Identifier | 10.4102/jef.v15i1.742 | |
| Source | Journal of Economic and Financial Sciences; Vol 15, No 1 (2022); 14 pages 2312-2803 1995-7076 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://jefjournal.org.za/index.php/jef/article/view/742/1476
https://jefjournal.org.za/index.php/jef/article/view/742/1477
https://jefjournal.org.za/index.php/jef/article/view/742/1478
https://jefjournal.org.za/index.php/jef/article/view/742/1479
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