Assessing the impact of capital structure on the performance of banks in the Arab nation

The vital role of capital structure in the performance of banks cannot be overemphasized, as several studies have investigated the capital structure-performance nexus across different economies and sectors. However, the findings of these studies are mixed or inconclusive. In addition, there is a relative deficiency of empirical studies examining the capital structure performance of bank linkage in Morocco. This study fills this gap, employing the pooled data of 4 Moroccan banks from 2010 through 2023. This study empirically examined the impacts of capital structure on the performance of four (4) Moroccan banks assessed by return on equity and return on assets. The results of the feasible generalized least squares showed that capital structure has mixed interactions with performance, as some of the capital structure proxies depict positive and negative linkages. The findings of this empirical study are of greater significance as they provide valuable insights for financial managers and regulators by enhancing their understanding of the complex processes that influence the performance of banks in Morocco.