DETERMINANTS OF CAPITAL STRUCTURE OF FIMRS LISTED IN CEMENT SECTOR OF KSE

Abstract

Purpose- the aim of the study is to examine the determinants of capital structure of cement sector listed firms in Karachi stock exchange and to explain the impact of the determinants on the capital structure. Methodology/sample- panel data model was used for this research. Mulitcolineartiy was used and panel data regression was used on 19 out of 20 KSE listed cement companies for the period of 5 years (2009 to 2013) Findings- The showed that profitability, liquidity and earning volatility has a negative significant impact whereas assets tangibility has an insignificant negative impact and size of the firm and growth opportunity has positive insignificant impact on the capital structure of the firm. Practical Implications- the results of the research help enhance the knowledge of the capital structure determinants and also help firms take effective capital structure related decisions. Furthermore this study helps financial decision makers better understand and consider better ways to manage capital structure in cement companies.