Open AccessCapital structure and regulation implications for South African banks
Author(s) -
Johannes H.v.H. De Wet
Publication year - 2013
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv11i1c9art1
Subject(s) - capital structure , miller , institution , capital (architecture) , business , financial institution , financial capital , financial system , economics , accounting , finance , political science , human capital , geography , economic growth , debt , ecology , archaeology , law , biology
Past research on capital structure was spearheaded by the ground-breaking models of Nobel Prize laureates Modigliani and Miller. However, little research has been done on the application of their and other theories to banking institutions located in Southern Africa. This study analyses the determinants of the capital structure of banks in South Africa based on secondary financial data and by performing this analysis attempts to establish trends in capital structure policy and regulatory compliance. The study also identifies best practices that contribute to the overall value and performance of the banking institution. Conclusions drawn from the results and literature create greater understanding of the dynamics of capital structure and its implications for South African Banks.