Determinants of Capital Structure and Its Impact on the Debt Maturity of the Textile Industry of Bangladesh

Abstract

Capital Structure is one of the most important and talked about issues in the field of finance. The fundamental components of capital structure are debt and equity of a company. Though different researchers provide different comment on the theory of capital structure, majority of theories and findings seem to contradict with each other in terms of developed and developing economy. Practitioners as well as researchers all over the world have identified that capital structure has impact on the firm performance and debt maturity. Research in capital structure is not adequate and require intense empirical work in Bangladesh. With that idea, objective of this study is to investigate the significance of determining factors of capital structure on debt maturity of the textile industry of Bangladesh. This article provided an analysis of various determining factors of capital structure and their significance on debt maturity. For this purpose, data of 19 DSE stock listed company for the time period of (2010 – 2015) 6 years were collected. Pooled data methodology has been used to find out the regression based on data collection. Findings of this data showed that age has significant relationship in case of all ratios considered under debt maturity. Growth opportunity was found as insignificant on the debt maturity. Profitability was found to have a significant relationship with total debt ratio (RTD) on the other hand converse relationship with Short term debt (RSD) and Long term debt ratio (RLD).