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Determinants of debt capital in Indian corporate sector: a quantile regression analysis

Author

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  • Krishnankutty, Raveesh
  • Chakraborty, Kiran Shankar

Abstract

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.

Suggested Citation

  • Krishnankutty, Raveesh & Chakraborty, Kiran Shankar, 2013. "Determinants of debt capital in Indian corporate sector: a quantile regression analysis," MPRA Paper 48307, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:48307
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    References listed on IDEAS

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    More about this item

    Keywords

    debt capital; quantile regression; Bombay stock exchange; capital structure; Indian corporate sector.;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • 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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