Factors affecting Leverage Decision: Empirical Evidence from
DOI:
https://doi.org/10.48165/gyanjyoti.2021.2103Keywords:
Asset Tangibility, Firm Size, Leverage, ProfitabilityAbstract
Leverage is the extent to which debt is used in company’s capital which has value to take tax advantage and also when benefit out of the assets purchased with the help of the Debt is greater than the cost of the Debt used to finance the Assets. Therefore, the management should determine the requirement of the Debt, examine of the Financial Markets and at the design of the use of leverage in Capital Structure. In the present research work, analysis has been done towards finding out the impact of the independent variables i.e. Firm Size, Asset Tangibility, Profitability on dependent variable i.e. Leverage of Public Oil and Gas Sector in India during the period of 5 years i.e. 2015-16 to 2019-20 through the statistical model. The study revealed that the models fitted have been the best described the behaviour of dependent variable against suitable alternatives and there has been a significant impact of independent variables on Leverage decision.The study found that the independent variables i.e. Firm Size, Asset Tangibility and Profitability have a negative/indirect impact on the Leverage decision.
Downloads
References
Ang, J. S., Chua, J. H., & Mcconnell, J. J. (1982). TheAdministrativeCostsofCorporateBankruptcy: A Note. Journal of Finance, 37(1), 219-226.
Baker, M., & Wurgler, J. (2002). Market timing and capital structure. Journal of Finance, 57(1), 1-32.
Booth, L., Aivazian, V., Demirguc-Kunt, A., & Maksimovic, V. (2001). Capital structures in developing countries. The journal of finance, 56(1), 87-130.
Cariola, A. (2010). The Influence of Local Institutional Differences on the Capital Structure of SMEs.International Small Business Journal, 28(3), 234-257.
Chen, J.(2004).Determinants of Capital Structure of Chinese Listed Companies.Journals of Business Research, 57(1), 1341-1351.
Chen, J. J. (2004). Determinants of capital structure of Chinese-listed companies. Journal of Business research, 57(12), 1341-1351.
Cinde, R. W. (2016). Factors Affecting the Capital Structure in Textile and Garment Listed in Indonesia Stock Exchange. IOSR Journal of Business and Management, 18(10), 83-88.
Frank, M. Z., & Goyal, V. K. (2009). Capital structure decisions: which factors are reliably important? Financial management, 38(1), 1-37.
Gonenc, H. (2003). Capital Structure Decisions under Micro Institutional Settings: The Case of Turkey. Journal of Emerging Markets Finance, 2(1), 57-82.
Goyal, V. K., Nova, A., & Zanetti, L. (2011). Capital Market Access and Financing of Private Firms. International Review of Finance, 11(2), 155-179.
Hamzah, H. H., & Marimuthu, M. (2019). An Overview:Oil and Gas Capital Structure.International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(4), 330-334.
Juliet, W. K., Barbar, N., & Elizabeth, W. (2018). Determinants Of Factors Affecting Capital Structure Decision Of Listed Insurance Companies in kenya. International Journal of Social Sciences and Information Technology, 4(9), 51-72.
Kaur, J. (2018). Determination of Factors Affecting Capital Structure of Micro, Small & Medium Enterprises in India. International Journal of Science and Research, 8(6), 974-977.
Khaki, A. R., & Akin, A. (2020). Factors affecting the capital structure: Newevidence from GCC countries. Journal of International Studies, 13(1), 9-27.
Mat Kila, S., & Wan Mansor, W. (2008). Capital Structure and Firm Characteristics: Some Evidence from Malaysian Companies. Journals of Applied Finance, 15(7), 19-25.
Matthews,H.(1994).CapitalStructureDecision Making in Privately Held Firms: BeyondtheFinanceParadigm.FamilyBusiness Review, 7(4), 349-367.
Merlo,P.,Dankiewicz,R.,A Ostrowska-Dankiewicz,A.(2013).Probabilistic And Statistical methods of risk analysis in the investments effectiveness evaluation and their application in business practice. Actual problems of Economics,(12), 437-446.
Modigliani, F., & Miller, M. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
Modigliani,F.,Miller,M.H.(1963).Corporate Income Taxes and the Cost of Capital: A Correction. The American Economic Review, 53(3), 433-443.
Mouamer, F. M. (2011). The determinants of capital structure of Palestine-listed companies. Journal of Risk Finance, 12(3), 226-241.
Myers, S. C. (1984). The capital structure puzzle. The journal of finance, 39(3), 574-592.
Myers, S. C., & Majluf, N. S. (1984). Corporate Financing and Investment Decisions When Firms Have Information That Investors Do Not Have. Journal of Financial Economics, 13(2), 187-221.
Nyanamba, S. O., Nyangweso, G. N., & Omari, S. M. (2013). Factors that Determine the Capital Structure among Micro-Enterprises: A Case Study of Micro-Enterprises in Kisii Town, Kenya.American International Journal of Contemporary Research, 3(7), 139-147.
Pahuja, A., & Sahi, A. (2015). Factors Affecting Capital Structure Decisions:Empirical evidence from Selected Indian Firms.International Journal of Marketing, Financial Services and Management Research, 3(3), 76-86.
Rajan, R. G., & Zingales, L. (1995). What do we know about capital structure: some evidence from international data. Journal of Finance, 50(5), 1421-1460.
Ronoowah, R. (2004). Determinants of Capital Structure: New Evidence from Small Island Developing State.The ICFAI Journals of Applied Finance, 13(3), 5-28.
Ross,S.(1977).TheDeterminationofFinancial Structure: The Incentive-Signaling Approach. The Bell Journal of Economics, 8(1), 23-40.
Sabir, M., & Malik, Q. A. (2012). Determinants of Capital Structure – A Study of Oil and Gas Sector Pakistan.Interdisciplinary Journal Of Contemporary Research In Business, 3(10), 395-400.
Downloads
Published
Issue
Section
License
Copyright (c) 2021 Dharmendra S. Mistry, Pallavi C. Vyas
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
How to Cite
