Vol 2, No 2 (2014)
Determinants of Corporate Debts: the Case of Oil & Gas and Textile Sector in Pakistan
Muhammad Nadeem Iqbal, Awais Ur Rehman, Moeen Ul Haq
Abstract
In this paper we examined the factors that are important for the determinants of the corporate debts structure. For that purpose we have chosen two most important sectors from an emerging economy like Pakistan (Oil and gas and textile sector) from KSE-100 index. We have applied the panel data analysis such as the common effect model as well as fixed-random effect models. The Hausman test recommends the random effect model. The results suggests that age of the corporations does not have any impact on its borrowing while the economic resources measured as total assets and fixed assets ratio revealed the positive significant relation with the debt. On the basis of the analysis it might be possible to conclude that the size of the firm does matter in the decision of capital structure specifically in borrowing decisions.
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Keywords
Corporate debt; Corporate borrowings; Fixed-random effects
Publication information
Volume 2, Issue 2
Year of Publication: 2014
ISSN: 1857 - 8721
Publisher: EDNOTERA
How to cite
Iqbal, M.N., Rehman, A.U., Haq, M.U. (2014). Determinants of Corporate Debts: the Case of Oil & Gas and Textile Sector in Pakistan. Journal of Applied Economics and Business, Vol 2, No. 2, 122-132.