An Empirical Study on the Determinants of Capital Structure in Pakistani companies

다국어 초록 (Multilingual Abstract)

This research is an empirical analysis of capital structure in Pakistani companies. It points out the institutional failure in Pakistan and provides suggestions to improve the capital structure. It focuses mainly on the capital structure of Pakistani firms authorized on Karachi Stock Exchange from 2004 to 2013. We also tend to find that what theory of capital structure explains the financing behavior of Pakistani firm. We uses dividend, tangibility, profitability and size as independent variables to find which of them determine capital structure (leverage) of companies in Pakistan. Three statistical models have been implemented for this research including Multiple Regression Analysis, Descriptive statistics and Histogram analysis. The strong positive impact of tangibility and size on leverage confirms the presence of trade-off theory. Pakistani firms with more tangibility (fixed asset) tend to have more leverage. Pakistani firms that are lager in size tend to have more leverage. Conclusion from prior research from developed countries is also valid in Pakistan case.

참고문헌 (Reference)

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