Econometric Analysis of the Capital Structure Determinants
Indian Institute of Management Calcutta (IIMC)Working Paper Series No. WPS-333/98
22 Pages Posted: 15 Jan 2007
Date Written: March 1998
"Studies on capital structure have been concentrated in developed countries; a few of them have been in countries such as India. This paper provides a) an empirical examination to the widely held existing theories on the determinants of corporate capital structure and their maturity; and b) attempts to develop and test a new theory on capital structure for large manufacturing firms in developing economies such as India. For, the different empirical and managerial implications about different periods of debt instruments, we analyze measures of short-term and long-term debt rather than only an aggregate measure of total debt. The study also analyses the empirical implications of liberalization of Indian economy, on the determinants of capital structure of the firm. Some of the results were found contrary to the classical financial theory."
Keywords: capital structure, India, determinants, econometric analysis, financing policy, debt maturities, liberalization
JEL Classification: G32, G38, N25, N65
Suggested Citation: Suggested Citation