CORPORATE GOVERNANCE AND CAPITAL STRUCTURE BEHAVIOR: AN EMPIRICAL EVIDENCE FROM AN EMERGING ECONOMY OF BANGLADESH

Abstract

This study investigates the connection between corporate governance and capital structure. Panel data was gathered from the annual reports of 105 manufacturing businesses listed on the Dhaka stock exchange between 2013 and 2022. The GMM model is used to assess the connection between dependent and independent variables. This study reveals a positive association between AUCS, BS, and capital structure, which is statistically insignificant, with a slight correlation between BM and capital structure, a negligible correlation between CEOREM and capital structure, and FS with TDTA. The results indicate that Bangladeshi enterprises might still adjust and improve their financial status, even though their corporate governance framework is rather outstanding when compared to underdeveloped countries. This study also contributes to knowledge of corporate governance's impact on capital structure management and governance procedures, comparing financial firms in Bangladesh with non-financial firms. It provides data for decision-makers to evaluate the suitability of corporate governance reforms.