کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
967908 | 931419 | 2013 | 11 صفحه PDF | دانلود رایگان |
This paper investigates the effect of group-affiliation on Indian corporate firms’ capital structure, based on data on 875 Indian non-financial firms for the period 2002–2010. The GMM turns out to be the most appropriate among the three alternative methods. Following our hypothesis, group-affiliated firms are found to have lower leverage than the stand-alone firms. Managers of group-affiliated firms seem to prefer equity as high leverage increases its bankruptcy risk. Also, firms are forced to cut capital requirements and R&D investments in order to service debt payments, damaging their long-run efficiency and competitive position. From our analysis the conclusion that follows for the policy makers is that although group-affiliation is considered to be beneficial for emerging economies like India in some earlier studies (Khanna & Palepu, 2000a), they ignored other dimensions of firm performance such as optimization of capital structure.
Journal: Journal of Policy Modeling - Volume 35, Issue 1, January–February 2013, Pages 110–120