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Capital Structure, Growth and Profitability: Evidence from Domestic Commercial Banks in Cambodia

Author

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  • Khun Sokang

    (Faculty of Management and Tourism, Cambodian Mekong University, Cambodia)

  • Nop Ratanak

    (College of Public Administration, Huazhong University of Science and Technology, China)

Abstract

This paper aims to examine the impact of capital structure and growth on the profitability of domestic commercial banks in Cambodia. The study uses a panel least squares (PLS) method using a sample of 10 domestic commercial banks in Cambodia over the period of 2005-2013 to examine the relationship between capital structure, growth, and profitability of commercial banks. The finding reveals that capital structure variables including debt to equity (DE), equity to loan (EL), and equity to deposit (ED) have a significantly negative impact on return on assets (ROA) and return on equity (ROE) with 1% significance level. Moreover, the growth variables including growth in assets (GA) and growth in equity (GE) have shown a positive relationship with ROA and ROE. A significant relationship exists only between GE and ROE at 1% significance level.

Suggested Citation

  • Khun Sokang & Nop Ratanak, 2018. "Capital Structure, Growth and Profitability: Evidence from Domestic Commercial Banks in Cambodia," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 5(1), pages 31-38, November.
    • Handle: RePEc:mgs:ijmsba:v:5:y:2018:i:1:p:31-38
    DOI: 10.18775/ijmsba.1849-5664-5419.2014.51.1004
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    More about this item

    Keywords

    Capital structure; Growth; Return on assets; Return on equity; Profitability; Cambodia;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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