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Ownership structure and capital structure: a panel data study

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  • Saurabh Chadha
  • Himanshu Seth

Abstract

Capital structure and ownership structure are two important concerns of overall firm's management. This paper studies the impact of ownership structure on the capital structure of the Indian manufacturing firms. The sample with a size of 1,150 manufacturing firms listed on Bombay Stock Exchange (BSE) of India and period of ten years from 2007 to 2016 has been deployed for purpose of the study. Panel data fixed effect model has been applied to test the relationship between capital structure and corporate governance factors. It was found that the ownership structure affects the capital structure decisions of the Indian manufacturing firms. Likewise, control variables like tangibility, age, growth, profitability and size are found to be significantly correlated with the firm's financial leverage. Thus, the findings of the study would enrich the literature on capital structure and comprehend the importance of ownership structure for the management of long-term funds.

Suggested Citation

  • Saurabh Chadha & Himanshu Seth, 2021. "Ownership structure and capital structure: a panel data study," International Journal of Business Innovation and Research, Inderscience Enterprises Ltd, vol. 24(3), pages 385-396.
    • Handle: RePEc:ids:ijbire:v:24:y:2021:i:3:p:385-396
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    Cited by:

    1. Andy - & S. H. Hengky, 2021. "Contraction of Capital Investment in Retail Trade Sub-Sector Companies on the Indonesia Stock Exchange," Business and Economic Research, Macrothink Institute, vol. 11(3), pages 19-34, December.
    2. Mohina Saxena & Surajit Bhattacharyya, 2022. "Industry dynamics and capital structure choice: Evidence from Indian manufacturing firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 829-845, April.

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