Contact Us

For Marketing, Sales and Subscriptions Inquiries
2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062

Conference List

Journal of Empirical Studies

June 2020, Volume 7, 1, pp 30-40

Influence of Corporate Characteristics on Firm Leverage: Evidence from Bangladesh

S. M. Khaled Hossain


Jobaer Hossan Akib


Md. Matiur Rahman

S. M. Khaled Hossain 1

Jobaer Hossan Akib 2
Md. Matiur Rahman 3

  1. Lecturer, Army Institute of Business Administration (AIBA), Savar Cantonment, Dhaka, Bangladesh. 1

  2. Undergraduate Student, Army Institute of Business Administration (AIBA), Savar Cantonment, Dhaka, Bangladesh. 2

  3. Credit Analyst, IFIC Bank Limited, Dhaka, Bangladesh. 3

Pages: 30-40

DOI: 10.18488/journal.66.2020.71.30.40

Share :

Article History:

Received: 16 July, 2020
Revised: 18 August, 2020
Accepted: 04 September, 2020
Published: 29 September, 2020


The purpose of the paper is to explore the influence of various corporate characteristics on financial leverage of the manufacturing companies listed at Dhaka Stock Exchange (DSE) in Bangladesh. A non-probability sampling technique has been used for selecting sample size from the population. Data from 40 manufacturing companies has been analyzed from 2015 to 2019-time period which are secondary in nature. Multiple regression methods were implied to explore the impact of corporate characteristics on leverage of the studied firms. The output from the regression models indicated that total assets, return on assets, return on sales and age are inversely and significantly connected to the leverage of companies. Selecting only the manufacturing company as the sample is a little limitation for this study. The study period is only five years including year of 2015-2019. The research results of this paper make contributions for the regulatory and enforcement authorities such as: ICAB, ICMAB, SEC and DSE. The information derived from the findings of the study will help financial managers to take decision regarding selection of optimal capital structure.
Contribution/ Originality
This study contributes to the existing literature about the influence of corporate characteristics on companies’ financial leverage especially in reference to 40 manufacturing companies enlisted in DSE in Bangladesh.


Leverage, Liquidity, Return on assets, Corporate characteristics.


Abobakr, M. G., & Elgiziry, K. (2016). The effect of board characteristics and ownership structure on the corporate financial leverage. Accounting and Finance Research, 5(1), 1-14. Available at:

Ahmad, N., Salman, A., & Shamsi, A. (2015). Impact of financial leverage on firms’ profitability: An investigation from cement sector of Pakistan. Research Journal of Finance and Accounting, 6(7), 2222-1697.

Ahmed, N., Ahmed, Z., & Ahmed, I. (2010). Determinants of capital structure: A case of life insurance sector of Pakistan. European Journal of Economics, Finance and Administrative Sciences, 24(24), 7-12.

Akinlo, O., & Asaolu, T. (2012). Profitability and leverage: Evidence from Nigerian firms. Global journal of Business Research, 6(1), 17-25.

Alfiyah, S. N. (2019). Effect of profitability and leverage on disclosure of corporate social responsibility in islamic commercial banks. Journal of Finance and Islamic Banking, 1(2), 133-149.

Bauer, P. (2004). Determinants of capital structure: Empirical evidence from the Czech Republic. Czech Journal of Economics and Finance (Finance a uver), 54(1-2), 2-21.

Bhuiyan, M. N. U., Hossain, S. M. K., & Akther, F. (2017). Environmental reporting practices and it's relationship with corporate characteristics: An evidence from manufacturing companies listed in Dhaka Stock exchange. The Cost and Management: The Journal of the Institute of Cost and Management Accountants of Bangladesh, 45(1), 3-11.

Chen, J. J. (2004). Determinants of capital structure of Chinese-listed companies. Journal of Business research, 57(12), 1341-1351.

De Jong, A., Kabir, R., & Nguyen, T. T. (2008). Capital structure around the world: The roles of firm-and country-specific determinants. Journal of Banking & Finance, 32(9), 1954-1969. Available at:

Deesomsak, R., Paudyal, K., & Pescetto, G. (2004). The determinants of capital structure: Evidence from the Asia Pacific region. Journal of Multinational Financial Management, 14(4-5), 387-405. Available at:

Eriotis, N., Vasiliou, D., Vasiliou, D., & Neokosmidi, V. Z. (2007). How firm characteristics affect capital structure: An empirical study. Managerial Finance, 33(5), 321-331.

Ezeoha, A., & Botha, F. (2012). Firm age, collateral value, and access to debt financing in an emerging economy: Evidence from South Africa. South African Journal of Economic and Management Sciences, 15(1), 55-71.

Fama, E. F., & French, K. R. (2002). Testing trade-off and pecking order predictions about dividends and debt. The review of Financial Studies, 15(1), 1-33. Available at:

Fengju, X., Yari Fard, R., Ghassab Maher, L., & Akhteghan, N. (2013). The relationship between financial leverage and profitability with an emphasis on income smoothing in Iran's capital market. European Online Journal of Natural and Social Sciences, 2(3 (s)), 156-164.

Ghosh, S. (2008). Leverage, foreign borrowing and corporate performance: Firm-level evidence for India. Applied Economics Letters, 15(8), 607-616.

Gill, A. S., Mand, H. S., Sharma, S. P., & Mathur, N. (2012). Factors that influence financial leverage of small business firms in India. International Journal of Economics and Finance, 4(3), 33-45. Available at:

Goyal, V. K., & Packer, F. (2017). Corporate leverage in emerging Asia. BIS Paper No. 91c.

Hall, G. C., Hutchinson, P. J., & Michaelas, N. (2004). Determinants of the capital structures of European SMEs. Journal of Business Finance & Accounting, 31(5-6), 711-728.

Hallajian, E., & Hashemi, M. (2016). Impact of firm size on leverage: An empirical study of companies listed on NSE of India. Management, 5(5), 99-101.

Hossain, S. K., Khan, M. R., & Haque, M. M. (2018). Corporate voluntary disclosure practices and its association with corporate attributes: An empirical investigation of listed and non-listed commercial banks in Bangladesh. International Journal of Managerial and Financial Accounting, 10(4), 331-351.

Huang, G., & Song, F. M. (2006). The determinants of capital structure: Evidence from China. China Economic Review, 17(1), 14-36.

Hussan, J. (2016). Impact of leverage on risk of companies. Journal of Civil & Legal Sciences, 5(4), 2169-0170.1000200.

Ibhagui, O. W., & Olokoyo, F. O. (2018). Leverage and firm performance: New evidence on the role of firm size. The North American Journal of Economics and Finance, 45, 57-82.

Ikechukwu, I. O., & Cyril, U. M. (2017). Effect of listing age on corporate financial leverage of oil and gas firms in Nigeria. International Journal of Economics, Finance and Management Sciences, 5(2), 92-102.

Kartikasari, D., & Merianti, M. (2016). The effect of leverage and firm size to profitability of public manufacturing companies in Indonesia. International Journal of Economics and Financial Issues, 6(2), 409-413.

Mazur, K. (2007). The determinants of capital structure choice: Evidence from Polish companies. International Advances in Economic Research, 13(4), 495-514.

Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261-297.

Myers, S. C. (2001). Capital structure. Journal of Economic perspectives, 15(2), 81-102.

Nurchaqiqi, R., & Suryarini, T. (2018). The effect of leverage and liquidity on cash dividend policy with profitability as moderator moderating. Accounting Analysis Journal, 7(1), 10-16.

Oduol, E. O. (2011). The relationship between liquidity and leverage of companies quoted at the NSE. Doctoral Dissertation.  

Pratheepkanth, P. (2011). Capital structure and financial performance: Evidence from selected business companies in Colombo stock exchange Sri Lanka. Researchers World, 2(2), 171-183.

Rouf, M. A. (2018). Corporate characteristics and leverage: Evidence from Bangladesh. PSU Research Review, 2(1), 96-104

Saeedi, A., & Mahmoodi, I. (2011). Capital structure and firm performance: Evidence from Iranian companies. International Research Journal of Finance and Economics, 70, 20-29.

San, O. T., & Heng, T. B. (2011). Capital structure and corporate performance of Malaysian construction sector. International Journal of Humanities and Social Science, 1(2), 28-36.

Sarlija, N., & Harc, M. (2012). The impact of liquidity on the capital structure: A case study of Croatian firms. Business Systems Research, 3(1), 30-36.

Serrasqueiro, Z. M. S., & Rogão, M. C. R. (2009). Capital structure of listed Portuguese companies. Review of Accounting and Finance, 8(1), 54-75.

Sharif, B., Naeem, M. A., & Khan, A. J. (2012). Firms characteristics and capital structure: A panel data analysis of Pakistans insurance sector. African Journal of Business Management, 6(14), 4939-4947.

Sherif, M., & Elsayed, M. (2013). The impact of corporate characteristics on capital structure: Evidence from the Egyptian insurance companies. East African Journal, 6, 23-34.

Tamimi, M., & Takhtaei, N. (2014). Relationship between firm age and financial leverage with dividend policy. Asian Journal of Finance & Accounting, 6(2), 53-62. Available at:

Tong, G., & Green, C. J. (2005). Pecking order or trade-off hypothesis? Evidence on the capital structure of Chinese companies. Applied Economics Letters, 37 (19), 2179-2189.

Vithessonthi, C., & Tongurai, J. (2015). The effect of firm size on the leverage–performance relationship during the financial crisis of 2007–2009. Journal of multinational financial management, 29, 1-29. Available at:

Viviani, J. L. (2008). Capital structure determinants: An empirical study of French companies in the wine industry. International Journal of Wine Business Research, 20 (2), 171-194.

Weill, L. (2008). Leverage and corporate performance: Does institutional environment matter? Small Business Economics, 30(3), 251-265. Available at:

Yoon, E., & Jang, S. (2005). The effect of financial leverage on profitability and risk of restaurant firms. The Journal of Hospitality Financial Management, 13(1), 35-47. Available at:

Zeitun, R., & Tian, G. G. (2007). Does ownership affect a firm's performance and default risk in Jordan? Corporate Governance: The International Journal of Business in Society, 7(1), 66-82.

Zelalem, D. (2020). The impact of financial leverage on the performance of commercial banks: Evidence from selected commercial banks in Ethiopia. International Journal of Accounting, Finance and Risk Management, 5(1), 62-68. Available at:

Zou, H., & Xiao, J. Z. (2006). The financing behaviour of listed Chinese firms. The British Accounting Review, 38(3), 239-258. Available at:


Google Scholor ideas Microsoft Academic Search bing Google Scholor


This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.


All authors contributed equally to the conception and design of the study.

Related Article

( 1 ) Influence Internship Learning Effect in Business Service Sector: Using Internship Self-Efficacy as the Mediator Variable
( 2 ) The Influence of Information Technology and Communication Supply Chain Management Performance for Greater SME Manufacturing in Aguascalientes
( 3 ) The Influence of Communication, Work Motivation and Career Development on Elementary School Teacher’s Job Performance in Medan, Indonesia
( 4 ) Factors that Influence Profitability of General Insurance Issuers in Indonesia
( 5 ) Does Social Barriers Influence Women's Intention toward Entrepreneurship?
( 6 ) What are the Contextual Influences of Bank Criminality in Osun East Senatorial District?
( 7 ) Influence of Corporate Characteristics on Firm Leverage: Evidence from Bangladesh
( 8 ) The Problem of Distribution of Food Products and their Influence on the Decision of Purchasing in the Consumer a Case Study of Milk Products in the South, Algeria
( 9 ) Importance of Corporate Governance Quality and Voluntary Disclosures of Corporate Governance Information in Listed Malaysian Family Controlled Businesses
( 10 ) The Association Between Corporate Risk Disclosure and Firm Performance in Emerging Country – The Case of Egypt
( 11 ) Promoting Local Acceptability of International Oil Companies (IOCS) Through Corporate Social Responsibility (CSR): The Case of Tullow Oil in Ghana
( 12 ) Corporate Funding and Sustainability of Non- Governmental Organizations in Africa
( 13 ) Implications of Accountants Unethical Behavior and Corporate Failures
( 14 ) Relevance of Stakeholders Theory, Organizational Identity Theory and Social Exchange Theory to Corporate Social Responsibility and Employees Performance in the Commercial Banks in Nigeria
( 15 ) Effects of Corporate Social Responsibility on Banks Financial Performance in Nigeria: A Study of United Bank of Africa
( 16 ) Determinants of Corporate Tax Avoidance Strategies among Multinational Corporations in Malaysia
( 17 ) The Effect of Corporate Social Responsibility Disclosure on Corporate Financial Performance
( 18 ) Determinants of Profitability and its Implications on Corporate Values (Studies at Ceramic, Porcelain and Glass Sub Sector Listed in Indonesia Stock Exchange, 2009 - 2018)
( 19 ) Corporate Social Responsibility Disclosure in Indonesia: A Bibliographic Study
( 21 ) Teachers Characteristics and Students’ Performance Level in Senior Secondary School Financial Accounting
( 23 ) Impact of Labour, Capital and Human Resources in Productivity of Transport Firms in Nigeria
( 25 ) The Effect of Selected Financial Ratios on Profitability: An Empirical Analysis of Listed Firms of Cement Sector in Saudi Arabia
( 26 ) Share Options, Share Award and Firm’s Performance: Evidence from Malaysian Public Listed Companies
( 27 ) Managerial Judgement Versus Financial Techniques in Strategic Investment Decisions: An Empirical Study on the Syrian Coastal Region Firms
( 28 ) Confirming the Mediation Effect of A Structural Model By Using Bootstrap Approach: A Case Study of Malaysian 8th Grade Students’ Mathematics Achievement
( 29 ) Empirical Evidence on Municipal Tax Policy and Firm Growth
( 30 ) The Indirect Impact of Overconfidence on the Performance of Tunisian Firms Through their Financing Structure
( 31 ) Firm-Level Investment Decisions Under Uncertainty and Irreversibility in Zimbabwes Private Firms
( 32 ) Re-Engineering Nigerian Economy through Human Capital Development: A Case of Manufacturing Firms In Southern Part of Nigeria
( 33 ) Do Derivative Instruments Increase Firm Risk for Indonesia Non-Financial Companies?
( 34 ) Does Capital Structure Affect the Profitability of Listed Family and Non-Family Firms? Evidence from Bangladesh
( 35 ) Change Management and Firm Performance of Selected Deposit Money Banks in Owerri, Imo State, Nigeria
( 36 ) Determinants of Firm Profitability: Evidences from Bangladeshi Manufacturing Industry
( 39 ) New Evidence on the Link Between Income Inequality and Misery Index: A Nonlinear Time Series Analysis
( 40 ) How Telecommunication Development Aids Economic Growth: Evidence from Itu Ict Development Index (IDI) Top Five Countries for African Region
( 41 ) The Impact of Human Capital on Economic Growth: Evidence from Tunisia Using Star and Stecm Models
( 42 ) The Nexus between Financial Crisis and Household Consumption: Evidence from Emerging Countries
( 43 ) Effective Tax Administration and Institutionalization of Accounting Systems in Small and Medium Scale Enterprises: Evidence from Nigeria
( 44 ) Moderating Effect of Demographics on Monetary Motivation and Employees Job Performance Relationship: Evidence from Malaysia
( 45 ) The Impact of Dividend Policy on Shareholders’ Wealth before and After Financial Melt down: Evidence from FMCG Sector in India
( 46 ) Stock Market Performance and Economic Growth: Evidence from Nigeria Employing Vector Error Correction Model Framework
( 48 ) Impact of Inflation on Per Capita Income in Emerging Economies: Evidence from BRICS Nations
( 49 ) Does Managerial Emotional Biases Affect Debt Maturity Preference? Bayesian Network Method: Evidence from Tunisia
( 51 ) The Effect of Exchange Rate Changes on Consumer Prices in Nigeria: Evidence from VECM Model
( 52 ) Testing the PPP Using Unit Root Tests with Structural Breaks: Evidence from Politically Unstable Arab Countries
( 53 ) Dynamics of Inflation, Economic Growth, Money Supply and Exchange Rate in India: Evidence from Multivariate Analysis
( 54 ) Does the Holiday Effect Differ from Religious to Non-Religious Holidays? Empirical Evidence from Egypt
( 55 ) Financial Deepening, Interest Rate Spread and Economic Growth: New Evidence from Sub-Sahara Africa
( 56 ) What Drives Banking Stability? Empirical Evidence from ECOWAS Countries
( 57 ) The Profitability of Momentum Strategies: Empirical Evidence from Damascus Securities Exchange (DSE)
( 58 ) An Investigation of the Relationship between Manufacturing Output and Economic Growth : Evidence from Nigerias Data Set
( 59 ) Macroeconomic Indicators and Capital Formation Growth in Nigeria: A New Evidence
( 60 ) Foreign Capital Inflows and Unemployment in Nigeria: A New Evidence from ARDL-Bounds Testing Approach
( 61 ) Forecasting Equity Index Volatility: Empirical Evidence from Japan, UK and USA Data
( 62 ) Intention to Use E-Recruitment System: Empirical Evidence from Jobseekers in the Advertising Industry in Malaysia
( 63 ) Disaggregated Foreign Capital Inflows and Economic Growth in a Developing Economy: Empirical Evidence from Nigeria
( 64 ) Exchange Rate and Foreign Reserves Interface: Empirical Evidence from Nigeria
( 65 ) External Debt and Economic Growth: Two-Step System GMM Evidence for Sub-Saharan Africa Countries
( 66 ) Impact of Network Finance Development on Inflation: Evidence from Chinese Market
( 67 ) The Relationship between Financial Development, Economic Growth, and Inflation: Evidence from Southeast Asia
( 68 ) Exchange Rate Pass-through to Prices: VAR Evidence for Albania
( 69 ) Externality Effects of Sachet and Plastic Bottled Water Consumption on the Environment: Evidence from Benin City and Okada in Nigeria
( 71 ) Analysis of Credit Ratings Determinants: Evidences in Brazilian and American States
( 72 ) The Impact of Social Media on Economic Growth: Empirical Evidence of Facebook, YouTube, Twitter and Pinterest
( 73 ) The Impact of Economic Growth, Oil Price, and Financial Globalization Uncertainty on Financial Development: Evidence from Selected Leading African Countries
( 74 ) Interest Rate Ceilings and Financial Exclusion in Kenya: Evidence from Commercial Banks’ Sectoral Credit Distribution
( 75 ) Non-Linear Effects of Intellectual Property Rights on Technological Innovation: Evidence from Emerging and Developing Countries
( 76 ) Effect of Tax Administration on Tax Revenue of States in African Countries: Evidence from Nigeria
( 79 ) Exploring the Linkages between Remittances, Economic Growth and Poverty: Empirical Evidence from Pakistan
( 87 ) Climate Change Adaptation in Semi-Arid Dodoma: An Experience from Eco-Village