What determines leverage in Pakistan? A panel data analysis

Qureshi, Muhammad Azeem; Imdadullah, Muhammad; Ahsan, Tanveer

doi:10.5897/ajbm11.1535

Cited by 3 publications

(2 citation statements)

References 34 publications

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“…Interestingly when the sample was cleaned from negative values of profit and an auxiliary regression was utilized, the relationship was found to be insignificant. Almost all studies that have followed Shah and Khan (2007) such as Rafiq et al (2008) Butt and Hasan (2009), Sheikh and Wang (2010), Ahmad et al (2010) Afza and Hussain (2011), Shiekh and Wang (2011), Qureshi et al (2012), Chhapra and Asim (2012) and Ahmad et al (2013) have defined leverage in similar fashion and always found leverage and profitability to be negatively related.…”

Section: Literature Reviewmentioning

confidence: 96%

“…Shah and Khan (2007), Ahmad et al (2013), Shahzad et al (2022), Ali et al (2021), Shah et al (2022) have focused on non-financial firms from various industries that are listed on the stock exchange. Others like Rafiq et al (2008), Afza and Hussain (2011), Murtaza and Azam (2019), Sheikh and Wang (2011), Qureshi et al (2012), , Hussain et al (2020), Sheikh et al (2023), ul Haque and Shaiq (2023), have focused on individual industries such as pharmaceutical, cement, chemical and sugar industries. Again, there are few studies that have focused only on textile sector such as Shiekh and Wang (2010), Chhapra and Asim (2012), Hussain et al (2021) and Shar et al (2023).…”

Section: Introductionmentioning

confidence: 99%

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Capital Structure Determinants in Pakistan's Textile Industry Unravelling the Pecking Order vs. Trade-Off Debate

Saeed,

Khan,

haq

2024

CRISS

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This study investigates the determinants of capital structure in textile sector of Pakistan in context of trade-off theory and Pecking order theory debate. The research utilizes data from 114 textile firms with 22 years of data from 1998 up to 2020. an adjusted measure of leverage is also introduced to refine the debt-to-equity ratio as conventional measure of leverage suffer from issues. Fixed effect model is used to analyse the relationship between leverage and independent variables such as profitability, tangibility, size, and growth using both conventional and adjusted measure of leverage. The adjusted measure of leverage is found unrelated to profitability unlike the conventional measure which always show negative relationship in current as well as previous studies. The positive relation between leverage and size supports pecking order theory, while tangibility was found to be negatively related challenging theoretical interpretations. While no conclusive evidence is found in favour of any theory the study does provide a fresh perspective on the theoretical debate.

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Section: Literature Reviewmentioning

confidence: 96%

Section: Introductionmentioning

confidence: 99%

Capital Structure Determinants in Pakistan's Textile Industry Unravelling the Pecking Order vs. Trade-Off Debate

Saeed,

Khan,

haq

2024

CRISS

View full text Add to dashboard Cite

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Dividends, Leverage and Endogeneity: A Simultaneous Equations Study on Malaysia

Ghasemi¹,

Razak²,

Muhamad³

2018

AABFJ

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Firm Level Determinants of Capital Structure: Evidence From Egypt

Sakr¹,

Bedeir²

2018

IJFR

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The purpose of this paper is to investigate the firm level determinants of capital structure of Egyptian publicly traded non-financial firms. The study investigates the firm level determinants of capital structure of Egyptian companies utilising data from the financial statements of 62 listed companies over the time period from 2003 to 2016. The study investigates whether the capital structure decisions in Egypt are closer to the assumptions of Trade-Off Theory, of Pecking Order Theory or of the Agency Cost Theory. The empirical evidence obtained allows us to conclude that Trade-Off and Pecking Order Theories are the most theories to describe the financial behaviour of the Egyptian companies' choice of capital structure whereas there was little evidence to support the agency cost theory.

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What determines leverage in Pakistan? A panel data analysis

Abstract: Most of the chemical sector firms in

Cited by 3 publications

References 34 publications

Capital Structure Determinants in Pakistan's Textile Industry Unravelling the Pecking Order vs. Trade-Off Debate

Capital Structure Determinants in Pakistan's Textile Industry Unravelling the Pecking Order vs. Trade-Off Debate

Dividends, Leverage and Endogeneity: A Simultaneous Equations Study on Malaysia

Firm Level Determinants of Capital Structure: Evidence From Egypt

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