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An Empirical Study on Capital Structure Decision of Select Automobile Companies in India


Affiliations
1 MBA-BU Dept, Dayananda Sagar Institutions, Bengaluru-560078, India
 

This paper attempts to examine the firm specific factors which determine the capital structure decisions of publicly traded automobile companies of India. Based on the market capitalization, top ten 2 & 3 wheeler auto mobile companies listed in NSE and BSE are selected. Using multi regression model, accounting data of companies over a period of 10 years from 2007-2016 is chosen and the empirical study is conducted. Firm specific factors such as tangibility, firm size, liquidity, non debt tax shield, growth rate and profitability have been analyzed to check their influence on the leverage structure of the selected automobile companies in Indian context. Total debt leverage is taken as dependent variable and firm specific factors are taken as independent variables. It has been found from the study that except for non debt tax shield all the other factors like tangibility, liquidity, profitability, growth rate and firm size are statistically significant determinants of capital structure of the listed automobile companies.

Keywords

Capital Structure, Leverage, Tangibility, Firm Size, Liquidity, Profitability.
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  • An Empirical Study on Capital Structure Decision of Select Automobile Companies in India

Abstract Views: 539  |  PDF Views: 314

Authors

R. Shalini
MBA-BU Dept, Dayananda Sagar Institutions, Bengaluru-560078, India
Mahua Biswas
MBA-BU Dept, Dayananda Sagar Institutions, Bengaluru-560078, India

Abstract


This paper attempts to examine the firm specific factors which determine the capital structure decisions of publicly traded automobile companies of India. Based on the market capitalization, top ten 2 & 3 wheeler auto mobile companies listed in NSE and BSE are selected. Using multi regression model, accounting data of companies over a period of 10 years from 2007-2016 is chosen and the empirical study is conducted. Firm specific factors such as tangibility, firm size, liquidity, non debt tax shield, growth rate and profitability have been analyzed to check their influence on the leverage structure of the selected automobile companies in Indian context. Total debt leverage is taken as dependent variable and firm specific factors are taken as independent variables. It has been found from the study that except for non debt tax shield all the other factors like tangibility, liquidity, profitability, growth rate and firm size are statistically significant determinants of capital structure of the listed automobile companies.

Keywords


Capital Structure, Leverage, Tangibility, Firm Size, Liquidity, Profitability.

References





DOI: https://doi.org/10.23874/amber%2F2017%2Fv8%2Fi2%2F166091