Title: Ownership structure and capital structure: a panel data study

Authors: Saurabh Chadha; Himanshu Seth

Addresses: Department of Management, BITS Pilani, 6068-V, New Academic Block, Pilani, Rajasthan, 333031, India ' Department of Management, BITS Pilani, 6070-F, New Academic Block, Pilani, Rajasthan, 333031, India

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.

Keywords: capital structure; financial leverage; ownership structure; corporate governance; panel data.

DOI: 10.1504/IJBIR.2020.10024975

International Journal of Business Innovation and Research, 2021 Vol.24 No.3, pp.385 - 396

Received: 10 Jan 2019
Accepted: 07 Jul 2019

Published online: 01 Mar 2021 *

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