Analysis of factors affecting the capital structure of banks in the MENA region: emphasis on the period 2000-2023

This study aims to determine the factors influencing the capital structure of banks in a sample of MENA region countries over the period 2000-2022 with 726 observations.The study employs panel data methods, integrating ordinary least squares, fixed effects, and random effects, to examine the relationship between book leverage and internal variables such as profitability, size, non-debt tax shield, growth opportunities, liquidity, and earnings.The research data suggest that banks have high leverage.The regression results indicate a positive impact of profitability, size, and growth opportunities on book leverage.In contrast, non-debt tax shield and liquidity have a negative effect on book leverage.Additionally, the results suggest that there is no significant and fluctuating impact of earnings on book leverage.Based on the findings, banks in the MENA region adopt specific and diverse methods, such as Islamic financing and the use of Shariacompliant financial instruments, to choose their capital structure, depending on their competitive advantages derived from the concentration of the large Muslim population they serve.