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

Dynamic Adjustment of Capital Structure under Bankruptcy Regime: Evidence from Indian Large-Cap Firms

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Authors

PKPiyush Jain Khiwasara

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Overview

Randomized trial investigates capital structure dynamics and determinants in large-cap firms, indicating key theoretical implications.

Key Points

  • This research aims to explore how large-cap firms in India adjust their capital structure toward optimal leverage and the factors influencing this process.
  • Analyzed data from the top 100 Indian large-cap firms from 2009-10 to 2024-25.
  • Utilized a dynamic panel framework with Driscoll-Kraay standard errors to estimate the speed of adjustment.
  • Evaluated the Trade-Off Theory and Pecking Order Theory through various statistical tests.
  • Firms adjust approximately 30–34% annually towards their target capital structure.
  • Profitability shows a strong negative relationship with leverage, supporting the Pecking Order Theory.
  • Tax shields and asset tangibility were found to be statistically insignificant in their effect on capital structure.

Cite This Study

Piyush Jain Khiwasara (2026) studied this question.

synapsesocial.com/papers/6a250cd27def13d035e1d001https://doi.org/10.56975/ijnti.v4i5.232706
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1Dynamic Capital Structure Adjustment in India: Evidence from Firm-Level Heterogeneity and Sectoral Differences2026
  2. 2Do Firms Time the Market? Evidence from Indian Corporations on Capital Structure Dynamics2026
  3. 3Do stronger creditors’ rights and an efficient bankruptcy process affect the speed of adjustment to target capital structure? Evidence from a quasi-natural experiment2024 · 2 citations
  4. 4Fundamental Risk and Capital Structure Adjustment Speed: International Evidence2025
  5. 5The effect of macroeconomic attributes on target leverage adjustment: an evidence from emerging economy2025