Journal of Entrepreneurship & Business
Vol. 3 No. 2 (2022): Journal of Entrepreneurship and Business (September)

Ownership Structure, Capital Structure, and Financial Performance: Evidence from Moroccan Large Banks

Mohamed Lachaari (LARGESS CEDOC CHOUAIB DOUKKALI UNIVERSITY)
Mustapha Benmahane (LARGESS, ChouaibDoukkali University, Morocco)



Article Info

Publish Date
28 Jul 2022

Abstract

Pupose: This article aims to verify how capital structure affects Moroccan banks' performance. First, we present a summarized literature review about capital structure's impact on firm value. Then we set a hypothesis from a theoretical model to be validated by a quantitative analysis of Moroccan's most essential bank data from 2006-2017, Method: The sample of this research is Moroccan's most essential bank data from 2006-2017. We were using an econometric Ordinary Last Square regression model. Result: Our findings show a negative relationship between banks' performance and equity ratio with good indicators. Therefore, leverage would be preferable to equity under the study's specific conditions, such as ignoring others factors and significant variables affecting return on equity. In addition, we found a significant influence of ownership structure on the relationship between equity ratio and financial performance of Moroccan banks. Indeed, we observed that foreign private and domestic public ownership influence the relationship between capital structure and a bank's performance. Then, we conclude that a bank's performance is generally related to a bank's capital structure. Moreover, the study was the first to choose equity ratio as a proxy for capital structure variable to observe the impact on financial performance in the context of the Moroccan banking sector.

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Journal Info

Abbrev

jerb

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance Social Sciences

Description

Journal of Entrepreneurship & Business (JEB) publishes all forms of quantitative and qualitative research articles and other scientific studies related to the field Accounting & Financial Management, E-Business Management, Entreprenuerhsip, Human Resources Management, Marketing Management, Operation ...