Title: The determinants of capital structure in Indian firms. Does industry matter?

Authors: Atif Ghayas; Tasneem Fatima Khan; Mohd Sarim

Addresses: Mittal School of Business, Lovely Professional University, Phagwara – 144411, Punjab, India ' Centre for Distance Education, AMU, Aligarh, India ' School of Commerce, Presidency University, Bengaluru – 560064, Karnataka, India

Abstract: The quest to find the ideal capital structure has motivated researchers worldwide to study the determinants of capital structure. There have been many studies in this area, but the results are mixed and contradictory. Most of the studies in this area have been conducted in developed countries; this study examines the determinants of the capital structure in a developing country like India. The study employs panel data regression techniques to analyse the impact of profitability, firm size, grow rate, tangibility, liquidity, interest coverage ratio, non-debt tax shield, tax rate, and business risk on the dependent variable, i.e., total debt. The study sample included a heterogeneous set of 222 firms from five industries listed on NSE 500. The study's findings reveal that profitability, firm size, liquidity, interest coverage, tax rate, and Business risk are important determinants of capital structure in Indian firms.

Keywords: determinants; capital structure; leverage; profitability; firm size; growth; tangibility; risk; industry.

DOI: 10.1504/IJBEX.2025.146594

International Journal of Business Excellence, 2025 Vol.36 No.2, pp.149 - 171

Received: 17 Feb 2021
Accepted: 10 Jul 2021
Published online: 06 Jun 2025 *

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