The Determinants of Capital Structure: A Case from Sugar Industry of Pakistan
International Journal of Management Sciences and Business Research, Vol. 5, Issue 11
9 Pages Posted: 6 Dec 2016
Date Written: November 2016
The purpose of this research is to find out the capital structure of listed firms in the sugar industry of Pakistan. The study finds that a particular industry’s capital structure exhibits unique attributes, which are usually not visible in the combined analysis of many sectors. The study took 5 firms in the sugar sector, listed at the Karachi Stock Exchange for the period 2008-2012 and analyzed the data by using multiple linear regressions. These are four independent variables i.e. firm size (measured by natural log of sales), tangibility of assets, net income and % change in assets. The results, except for firm size and growth were found highly significant. The regression model is found to be significant. Only growth and size of firms were found insignificant and have positive relationship with leverage. So, capital structure of firms in sugar industry mainly depends upon their sizes and growth opportunities.
Keywords: Capital Structure, Sugar industry, Karachi Stock Exchange, Pakistan
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