Determinants of debt capital in Indian corporate sector: a quantile regression analysis
Capital obtained from borrowing is called debt capital. Many studies in the past as well as present provided immense evidence about the determinants of capital structure of a firm. In this scenario the present study looking in to the determinants of debt capital in the capital structure. The analysis is based on data collected from 213 listed companies of Bombay Stock Exchange 500 index using capital line data base during the period 2002-2011. Most of the variables show skewed and Kurtic distribution the study relied upon quantile regression analysis as an appropriate tool to find the determinants of debt capital. The study found that for the quantile ranging from 0.05th, 0.25th, 0.50th, 0.75th, and 0.95th. We found that long-term leverage, assets structure and size are positively determining the debt capital at 0.05th quantile. For the quarter quantile (0.25th) and median quantile (0.50th) Financial risk, long term leverage and size are positively and debt capacity is negatively determine the debt capital. More over financial risk and long-term leverage are positively determining the debt capital for 075th quantile. However in case of highest quantile (0.95th) long-term leverage and non-debt tax shield are positively determine the debt capital mean while debt capacity is negatively determine the debt capital.
|Date of creation:||02 May 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hovakimian, Armen & Opler, Tim & Titman, Sheridan, 2001. "The Debt-Equity Choice," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 36(01), pages 1-24, March.
- Wald, John K, 1999. "How Firm Characteristics Affect Capital Structure: An International Comparison," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 22(2), pages 161-87, Summer.
- Alan Bevan & Jo Danbolt, 2002. "Capital structure and its determinants in the UK - a decompositional analysis," Applied Financial Economics, Taylor & Francis Journals, vol. 12(3), pages 159-170.
- Michaelas, Nicos & Chittenden, Francis & Poutziouris, Panikkos, 1999. " Financial Policy and Capital Structure Choice in U.K. SMEs: Empirical Evidence from Company Panel Data," Small Business Economics, Springer, vol. 12(2), pages 113-30, March.
- Frank, Murray Z. & Goyal, Vidhan K., 2003. "Testing the pecking order theory of capital structure," Journal of Financial Economics, Elsevier, vol. 67(2), pages 217-248, February.
- Harris, Milton & Raviv, Artur, 1991. " The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
- Rajan, Raghuram G & Zingales, Luigi, 1995.
" What Do We Know about Capital Structure? Some Evidence from International Data,"
Journal of Finance,
American Finance Association, vol. 50(5), pages 1421-60, December.
- Raghuram G. Rajan & Luigi Zingales, 1994. "What Do We Know About Capital Structure? Some Evidence from International Data," NBER Working Papers 4875, National Bureau of Economic Research, Inc.
- Toy, Norman & Stonehill, Arthur & Remmers, Lee & Wright, Richard & Beekhuisen, Theo, 1974. "A Comparative International Study of Growth, Profitability, and Risk as Determinants of Corporate Debt Ratios in the Manufacturing Sector," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 9(05), pages 875-886, November.
- Warner, Jerold B, 1977. "Bankruptcy Costs: Some Evidence," Journal of Finance, American Finance Association, vol. 32(2), pages 337-47, May.
- Titman, Sheridan & Wessels, Roberto, 1988. " The Determinants of Capital Structure Choice," Journal of Finance, American Finance Association, vol. 43(1), pages 1-19, March.
- Bradley, Michael & Jarrell, Gregg A & Kim, E Han, 1984. " On the Existence of an Optimal Capital Structure: Theory and Evidence," Journal of Finance, American Finance Association, vol. 39(3), pages 857-78, July.
- Aydin Ozkan, 2001. "Determinants of Capital Structure and Adjustment to Long Run Target: Evidence From UK Company Panel Data," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 28(1-2), pages 175-198.
- Huang, Guihai & Song, Frank M., 2006. "The determinants of capital structure: Evidence from China," China Economic Review, Elsevier, vol. 17(1), pages 14-36.
- Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-29, May.
- Easterbrook, Frank H, 1984. "Two Agency-Cost Explanations of Dividends," American Economic Review, American Economic Association, vol. 74(4), pages 650-59, September.
- Booth, L. & Asli Demirgu-Kunt, V.A. & Maksimovic, V., 1999.
"Capital Structure in Developing Countries,"
Rotman School of Management - Finance
00-001, Rotman School of Management, University of Toronto.
- Delcoure, Natalya, 2007. "The determinants of capital structure in transitional economies," International Review of Economics & Finance, Elsevier, vol. 16(3), pages 400-415.
- Joao Pedro Azevedo, 2004. "GRQREG: Stata module to graph the coefficients of a quantile regression," Statistical Software Components S437001, Boston College Department of Economics, revised 17 Mar 2011.
- Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
- Wiwattanakantang, Yupana, 1999. "An empirical study on the determinants of the capital structure of Thai firms," Pacific-Basin Finance Journal, Elsevier, vol. 7(3-4), pages 371-403, August.
- A. Noulas & G. Genimakis, 2011. "The determinants of capital structure choice: evidence from Greek listed companies," Applied Financial Economics, Taylor & Francis Journals, vol. 21(6), pages 379-387.
- Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
- Myers, Stewart C, 1984. " The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-92, July.
- Chang, Chun, 1999. "Capital structure as optimal contracts," The North American Journal of Economics and Finance, Elsevier, vol. 10(2), pages 363-385.
- Chittenden, Francis & Hall, Graham & Hutchinson, Patrick, 1996. " Small Firm Growth, Access to Capital Markets and Financial Structure: Review of Issues and an Empirical Investigation," Small Business Economics, Springer, vol. 8(1), pages 59-67, February.
- Michael J. Barclay & Clifford W. Smith, 1996. "On Financial Architecture: Leverage, Maturity, And Priority," Journal of Applied Corporate Finance, Morgan Stanley, vol. 8(4), pages 4-17.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:48307. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.