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June 10, 2026INTERNATIONAL JOURNAL OF NOVEL TRENDS AND INNOVATIONOpen Access

Dynamic Capital Structure Adjustment in India: Evidence from Firm-Level Heterogeneity and Sectoral Differences

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Authors

JKJ KushalDRDr. Pujari Sudarsana Reddy

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Overview

Randomized trial examines leverage adjustments in Indian firms, indicating variations across industries.

Key Points

  • The study investigates whether Indian firms target a level of leverage and how this adjusts across industries.
  • Data from 100 publicly listed Indian firms from 2009 to 2025 was analyzed.
  • Dynamic fixed effect estimation model was utilized to control for econometric issues.
  • Lagged dependent variable and clustered standard error were incorporated in the analysis.
  • Firms adjust to a target leverage value with a coefficient of 0.6344, indicating a 63.44% adjustment per year.
  • Profitability shows a negative relationship with leverage, aligning with the pecking order theory.
  • Financial firms adjust their capital structure faster than non-financial firms.

Cite This Study

Kushal et al. (2026) studied this question.

synapsesocial.com/papers/6a28fff36f82f25be989ca90https://doi.org/10.56975/ijnti.v4i5.232686
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Also Consider

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

  1. 1Dynamic Adjustment of Capital Structure under Bankruptcy Regime: Evidence from Indian Large-Cap Firms2026
  2. 2Do Firms Time the Market? Evidence from Indian Corporations on Capital Structure Dynamics2026
  3. 3The effect of macroeconomic attributes on target leverage adjustment: an evidence from emerging economy2025
  4. 4FINANCIAL FLEXIBILITY AND SPEED OF CAPITAL-STRUCTURE ADJUSTMENT AMONG NIGERIAN LISTED FIRMS2026
  5. 5Fundamental Risk and Capital Structure Adjustment Speed: International Evidence2025 · 2 citations