The Effect of Corporate Strategy and Capital Structure on Performance of Banking Sector of Pakistan

Abstract

The finance literate has widely discussed two important relationships: (1) Corporate strategy and firm performance (2) Capital structure and firm performance However, most studies ignore the combined effect of corporate strategy and capital structure on firm performance. Our study tries to tackle this issue and uses sample from the listed companies in Pakistan which will prove the commonalties that exist between these domains of business research. This will help support the arguments of some researchers in the banking industry who have stressed the importance of assessing the firm#x2019;s strategies using concepts in finance. The overall objective of this study is to test the viability of the #x201C;effect of corporate strategy and capital structure on firm#x2019;s performance#x201D; using strategic management and corporate finance theory. The present study identifies the dimensions and variables using prior research within each of the constructs studied under the management and corporate finance domains, vis-a-vis corporate strategy, capital structure and firm performance.