Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks

Kamal Naser; Abdullah Al- Mutairi; Ahmad Al Kandari; Rana Nuseibeh

Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks

Year 2015, Volume: 5 Issue: 4, 979 - 988, 01.12.2015

Kamal Naser Abdullah Al- Mutairi Ahmad Al Kandari Rana Nuseibeh

Abstract

This study is set out to examine the cogency of capital structure theories in a unique Islamic financial environment where tax shield is irrelevant, paying or receiving interest is undesirable and government exercises control over major economic activities. To achieve this objective, the annual reports of all Kuwaiti banks listed on the Kuwait Stock Exchange (KSE) for the period between 2010 and 2014 were used to extract internal bank variables. In addition, external macroeconomic data were extracted from World Bank statistics. The results of the pooled regression analysis disclosed that the capital structure of the Kuwaiti banks are influenced by their size measured by total assets, cash dividends paid and the market value/ book value of the bank's share. While the result was inconsistent with agency theory, it provides support to the pick-order, trade off and market theories.

Keywords

Capital structure, firm size, Pecking Order Theory, Static Trade-off Theory, Banking Sector, Kuwait Stock Exchange, Kuwait

Year 2015, Volume: 5 Issue: 4, 979 - 988, 01.12.2015

Kamal Naser Abdullah Al- Mutairi Ahmad Al Kandari Rana Nuseibeh

Abstract

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Details

Other ID	JA69EC22SC
Journal Section	Research Article
Authors	Kamal Naser This is me Abdullah Al- Mutairi This is me Ahmad Al Kandari This is me Rana Nuseibeh This is me
Publication Date	December 1, 2015
Published in Issue	Year 2015 Volume: 5 Issue: 4

Cite

APA	Naser, K., Mutairi, A. A.-., Kandari, A. A., Nuseibeh, R. (2015). Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks. International Journal of Economics and Financial Issues, 5(4), 979-988.
AMA	Naser K, Mutairi AA, Kandari AA, Nuseibeh R. Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks. IJEFI. December 2015;5(4):979-988.
Chicago	Naser, Kamal, Abdullah Al- Mutairi, Ahmad Al Kandari, and Rana Nuseibeh. “Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks”. International Journal of Economics and Financial Issues 5, no. 4 (December 2015): 979-88.
EndNote	Naser K, Mutairi AA-, Kandari AA, Nuseibeh R (December 1, 2015) Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks. International Journal of Economics and Financial Issues 5 4 979–988.
IEEE	K. Naser, A. A.-. Mutairi, A. A. Kandari, and R. Nuseibeh, “Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks”, IJEFI, vol. 5, no. 4, pp. 979–988, 2015.
ISNAD	Naser, Kamal et al. “Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks”. International Journal of Economics and Financial Issues 5/4 (December 2015), 979-988.
JAMA	Naser K, Mutairi AA-, Kandari AA, Nuseibeh R. Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks. IJEFI. 2015;5:979–988.
MLA	Naser, Kamal et al. “Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks”. International Journal of Economics and Financial Issues, vol. 5, no. 4, 2015, pp. 979-88.
Vancouver	Naser K, Mutairi AA-, Kandari AA, Nuseibeh R. Cogency of Capital Structure Theories to an Islamic Country: Empirical Evidence from the Kuwaiti Banks. IJEFI. 2015;5(4):979-88.