Concerning the Effects of Capital Structure on Performance of Listed Non-Bank Financial Institutions Under DSE: Empirical Evidence from Bangladesh

Abstract

This study analyses some selected non-bank financial firms' capital structures and performance using panel data over the period of 13 years from 2011–2023. These firms are listed on the Dhaka Stock Exchange. The Corrected Standard Error Panel (PCSE) model is used to examine the impact of capital structure and financial performance. As dependent variables, this study employed ROE, ROA, EPS, P/E, and Tobin Q. Long-term debt, short-term debt, overall debt, size, and inflation were independent factors. ROE, ROA, EPS, P/E, and Tobin's Q were employed, along with LTD, STD, and TD. Inflation and measurements were used as macroeconomic variables. The regression study shows that TD's capital structure affects the company's EPS. The studies also show that ROE is adversely connected with TD's capital structure. ROE, EPS, STD, and LTD have no significant relationship. The study found no correlation between ROA, P/E ratios, and capital structure. Tobin's Q has a substantial unfavorable connection with STD & LTD. Tobin's Q is unrelated to TD. Firm size strongly affects ROE, Tobin Q, and P/E ratio, demonstrating that the variables are regulated. Other key findings include adaptable factors like ROA and EPS size. Inflation has a substantial positive influence on ROA, EPS, and P/E, but a moderate impact on ROE and Tobin Q. According to the Pecking Order Theory, a company's finance structure hinders its capacity to provide consistent results.