Abstract
In this study, an attempt has been made to investigate any significant changes in variables influencing the capital structure decisions among selected companies from Nifty-50 Index. The financing behaviour of the companies are explained by using Panel data analysis – fixed and random effects. As per the analysis, it is observed that Business Risk, Growth Rate, Profitability, Size (log assets) and Size (log sales) are the significant variables influencing the capital structure over the study period. Finally, the study concludes that neither the pecking order theory nor the trade-off theory fully explains the determinants of capital structure for the selected companies.
Publisher
The Institute of Cost Accountants of India
Reference6 articles.
1. Amidu, M. (2007). Determinants of capital structure of banks in Ghana: an empirical approach. Baltic Journal of Management, 2(1), 67-79. https://doi.org/10.1108/17465260710720255
2. Beattie V., Goodacre A., and Thomson S.J. (2004). Diversity and Determinants of Corporate Financing Decisions: Survey Evidence. Available at SSRN: https://ssrn.com/abstract=564602 or http://dx.doi.org/10.2139/ssrn.564602
3. Hsiao, C. (1999), Analysis of Panel Data. Cambridge: Cambridge University Press. https://assets.cambridge.org/052181/8559/sample/0521818559ws.pdf
4. Kraus, A., & Litzenberger, R. H. (1973). A State-Preference Model of Optimal Financial Leverage. The Journal of Finance, 28(4), 911–922. https://doi.org/10.2307/2978343
5. Modigliani, F., & Miller, M. H. (1959). The Cost of Capital, Corporation Finance, and the Theory of Investment: Reply. The American Economic Review, 49(4), 655–669. http://www.jstor.org/stable/1812919