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Determinants of capital structure: comparison of empirical evidence for the use of different estimators

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  • Aviral Kumar TIWARI

    (IFHE University, IBS Hyderabad, India)

  • Raveesh KRISHNANKUTTY

    (IFHE University, IBS Hyderabad, India)

Abstract

This paper briefly tries to define the fundamentals underlying capital structure theories and evaluates whether some a priori assumed macroeconomic determinants can be related to the leverage parameters of interest examined in the paper. For this purpose, we conduct an empirical research that covers 90 selected firms traded on the BSE Stock Exchange. For the empirical analysis panel data methodology has been applied. The study period is 2002-2009 Our main results reveal that there is a negative and statistically significant relationship between non-debt tax shields and size and debt and there is a positive and statistically significant relationship between growth and ratio of fixed assets to total assets debt.

Suggested Citation

  • Aviral Kumar TIWARI & Raveesh KRISHNANKUTTY, 2014. "Determinants of capital structure: comparison of empirical evidence for the use of different estimators," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(12(601)), pages 63-82, December.
    • Handle: RePEc:agr:journl:v:xxi:y:2014:i:12(601):p:63-82
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    Cited by:

    1. Jędrzejczak-Gas Janina, 2017. "Determinants of the capital structure of TSL sector enterprises," Management, Sciendo, vol. 22(1), pages 122-139, September.
    2. Amit Hedau & Shailender Singh & Huwati Janor, 2018. "Determinants Of Capital Structure – A Sector Specific Approach," Romanian Economic Business Review, Romanian-American University, vol. 13(4), pages 14-30, december.

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    More about this item

    Keywords

    debt; dynamic panel estimators; static panel models; capital structure; BSE stock exchange.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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