What does this research mean for the field?

Indian firms predominantly follow a hierarchical financing pattern consistent with pecking order theory rather than engaging in market timing behavior. Novelty: ClaimNovelty.CONTRADICTORY. Consensus alignment: ConsensusAlignment.CHALLENGES_CONSENSUS.

What question did this study set out to answer?

The research investigates whether Indian firms time the market effectively regarding their capital structure decisions.

June 7, 2026INTERNATIONAL JOURNAL OF NOVEL TRENDS AND INNOVATIONOpen Access

Do Firms Time the Market? Evidence from Indian Corporations on Capital Structure Dynamics

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Authors

NMNishi MishraJain University PRPujari Sudharsana ReddyJain University

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Implication

Examines capital structure determinants in Indian firms, indicating a preference for hierarchical financing over market timing.

Key Points

The research investigates whether Indian firms time the market effectively regarding their capital structure decisions.
Analyzed the top 100 Indian companies by market capitalization with 907 firm-year observations.
Employed a two-way fixed effects model to account for firm-specific and time-specific variables.
Considered factors including lagged leverage, market-to-book ratio, profitability, firm size, tangibility, and growth opportunities.
Market-to-book ratio positively affects leverage (p<0.05), contradicting market timing theory.
Profitability shows a strong negative relationship with leverage, consistent with pecking order theory.
Firm size positively influences leverage while growth opportunities negatively impact leverage.

Cite This Study

Mishra et al. (2026) studied this question.

synapsesocial.com/papers/6a250c7d7def13d035e1c9b2 https://doi.org/10.56975/ijnti.v4i5.232472

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Do Firms Time the Market? Evidence from Indian Corporations on Capital Structure Dynamics

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Implication

Key Points

Cite This Study

Do Firms Time the Market? Evidence from Indian Corporations on Capital Structure Dynamics

Discussion

Member takes

Implication

Key Points

Cite This Study

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