A Study on Factors Influencing Capital Structure of Pharmaceutical Companies Listed on the Karachi Stock Exchange

12 Pages Posted: 20 Jan 2013

See all articles by H. Jamal Zubairi

H. Jamal Zubairi

Institute of Business Management

Shazia Farooq

Institute of Business Management (IoBM)

Date Written: January 20, 2013

Abstract

This study focuses on investigating the factors influencing the capital structure of seven companies listed in the pharma and biotech sector of the Karachi Stock Exchange. Leverage has been designated as a representative of capital structure. Seven variables (all financial) are assumed independent and leverage has been taken as the dependent variable forming the basis for our pooled regression model. At an assumed 5% level of significance, three null hypotheses are rejected. Reliability tests namely Cronbach’s Alpha measure is run in order to verify that the model is stable over time. The results of this test suggest inconsistency in the case of the entire range of the data but if considered individually the consistency, 5 out of 7 variables have positive alphas. However, the conclusions drawn from the model are tentative.

Keywords: Capital structure, leverage, pharmaceutical sector, Pakistan

JEL Classification: C23, G32, G33

Suggested Citation

Zubairi, Hamid Jamal and Farooq, Shazia, A Study on Factors Influencing Capital Structure of Pharmaceutical Companies Listed on the Karachi Stock Exchange (January 20, 2013). Available at SSRN: https://ssrn.com/abstract=2203634 or http://dx.doi.org/10.2139/ssrn.2203634

Hamid Jamal Zubairi (Contact Author)

Institute of Business Management ( email )

Plot # 84
Korangi Creek
Karachi, Sindh 75190
Pakistan
92-21-111002004 (Phone)

Shazia Farooq

Institute of Business Management (IoBM) ( email )

Plot # 84
Korangi Creek
Karachi, Sindh 75190
Pakistan

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