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dc.contributor.authorQureshi, Muhammad Azeemen_US
dc.contributor.authorImdadullah, Muhammaden_US
dc.contributor.authorAhsen, Tanveeren_US
dc.date.accessioned2013-10-10T11:30:50Z
dc.date.available2013-10-10T11:30:50Z
dc.date.issued2012en_US
dc.identifier.citationQureshi, M. A., Imdadullah, M., & Ahsan, T. (2012). What determines leverage in Pakistan? A panel data analysis. African Journal of Business Management, 6(3), 978-985.en_US
dc.identifier.issn1993-8233en_US
dc.identifier.otherFRIDAID 920695en_US
dc.identifier.urihttps://hdl.handle.net/10642/1640
dc.description.abstractMost of the chemical sector firms in Pakistan have foreign ownership or collaboration with foreign companies. It may be hypothesized that the leverage behavior of such firms is likely to be in line with the results of international studies of leverage generally carried out in developed economies. But there are a number of factors which differentiate developed economies from the developing ones. Hence, we identify an interesting conjunction for our research to add to the existing body of literature empirical evidence as to what determines leverage in chemical sector firms of Pakistan which have generally foreign ownership/collaboration. For this purpose we use the data of all listed firms of chemical sector of Pakistan for the period 1988 to 2006 (19 years). We use the framework provided by two competing theories, trade-off theory (TOT) and pecking order theory (POT), to identify the determinants of capital structure in the sector by using panel data models to identify the determinants of leverage and nature of their relationship. We find a significant direct relationship between profitability, business risk and leverage. This finding is consistent with TOT and negates the findings of some of the earlier studies in Pakistani context. Further, we find an inverse relationship between size, growth and leverage which is consistent with POT. These findings suggest that most of the chemical sector firms of Pakistan, having foreign ownership/collaboration, use a mix of local and international strategies for their leverage formation in Pakistan.en_US
dc.language.isoengen_US
dc.publisherAcademic Journalsen_US
dc.relation.ispartofseriesAfrican Journal of Business Management;6(3)en_US
dc.subjectPecking order theoryen_US
dc.subjectTrade-off theoryen_US
dc.subjectCapital structureen_US
dc.subjectChemical sectoren_US
dc.subjectPakistanen_US
dc.subjectVDP::Samfunnsvitenskap: 200::Økonomi: 210en_US
dc.titleWhat determines leverage in Pakistan? A panel data analysisen_US
dc.typeJournal articleen_US
dc.typePeer revieweden_US
dc.description.versionCreative Commons Attribution Licence
dc.identifier.doihttp://dx.doi.org/10.5897/AJBM11.1535


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