Does Leverage Influence on Investment Decision: Evidence From Pakistan

Posted: 7 May 2019

Date Written: April 9, 2019

Abstract

This paper inspects, the link between leverage and investment by using a panel data approach for non-financial Pakistani listed companies under Karachi Stock exchange over the period from 2008 to 2017. We find a negative link between leverage and investment in the context of the Pakistani market. However, this negative relationship does not hold similar for higher growth and lower growth opportunities firm. We find that leverage has a significantly negative effect on investment for lower growth opportunities for firms than higher growth opportunities firms.

Keywords: Leverage, Investment decision, emerging markets

JEL Classification: G3

Suggested Citation

Ali, Furman, Does Leverage Influence on Investment Decision: Evidence From Pakistan (April 9, 2019). Available at SSRN: https://ssrn.com/abstract=3368920

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