Determinants of Corporate Capital Structure of Indian Industries

Abstract

This paper studies the determinants of capital structure choice of selected Indian industries. Our main objective is to investigate whether and to what extent the main capital structure theories can explain the capital structure choice of Indian firms. We have applied multiple regression model on the selected industries by taking data for the period 2001-2008. The main variables determining the capital structure of industries in India are agency cost, assets structure, non-debt tax shield and size. The coefficients of these variables are significant at one percent or five percent level.