Author(s): Mohammad Fawzi Shubita
Corporate governance is the system of practices, rules, and processes which control and direct a company. Corporate governance essentially consists of balancing the interests of a company's many stakeholders, such as managers, shareholders, customers, suppliers, government officials, financiers, and communities. This study empirically investigated the impact of corporate governance components on the capital structure decisions of Jordanian banks. The study used regression model on 13 Jordanian banks, the total number of observations for analysis was 104. and found that board size did not have a significant positive impact on debt ratio and the ownership concentration coefficient was not significant, which indicated that this factor did not have an effect on banks’ debt-ratio values. This may be due to the fact that banks increase protection against risks when they have more corporate governance tools, and this strengthens the bank’s ability to increase internal funds. The study recommended that some measures of capital structure need more investigations in the future and future studies may include more tools.