Determinants of Capital Structure of Indian Automobile Industry- a Case Study

Abstract

The current study seeks to identify the potential firm specific factors of the Automobile sector in India that have an impact on leverage ratio. Eight explanatory variables, namely, profitability, size, growth, tangibility, NDTS, income variation, liquidity and uniqueness have been considered to analyze their influences and over all explaining power on leverage in the light of three important capital structure theories such as, trade-off theory, pecking order theory and agency cost theory.