Capital Structure Variations: A Study of Indian Corporate
Res Manageria, 2011, Vol. 2, Issue 3, 29-42
14 Pages Posted: 20 Oct 2013 Last revised: 22 Oct 2013
Date Written: June 30, 2011
Abstract
The present study is aimed at to examine the reason of existence of the inter-firm and inter-industry differences in the capital structure of Indian firms and to identify the possible sources of such variation in capital structure. We propose to analyze the financing pattern of 300 Indian private sector companies, comprising of 20 different sectors for the period 1999-2000 to 2007-2008. We have taken the data of top 15 companies of each sector selected on the basis of their total assets value as on 31st March 2008. By using the techniques of funds flow, ratio analysis and correlation analysis, we have tried to find out the ways in which different companies at different times and in different institutional environments have financed their operations; and to identify possible implications of these financing patterns. The central issue we will address is to examine empirically the existence of inter-firm and inter-industry differences in the capital structure of Indian firms and identify the possible sources of such variation in capital structure. We will also try to find out the factors that determine the financing pattern of capital structure of Indian companies, particularly in the private sector.
Keywords: Capital structure, Indian corporate, Leverage, Private sector
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