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Corporate financing and deleveraging of firms in India
Published in Elsevier
2017
Volume: 29
   
Issue: 3
Pages: 170 - 187
Abstract
The paper highlights systematic deleveraging of firms in India and explores the factors contributing to such deleveraging. The paper further highlights that deleveraging is pervasive in manufacturing and non-manufacturing firms almost equally. The empirical findings of the paper suggest that most consistent theoretical determinants of corporate leverage fail to explain the decline in debt ratios of the firms. However, institutional deficiencies in the form of underdeveloped bond markets and decline in corporate investments were found to be significant in explaining the decline. The results suggest that firms could be credit rationed and hence losing value on account of such deficiencies.
About the journal
JournalData powered by TypesetIIMB Management Review
PublisherData powered by TypesetElsevier
ISSN0970-3896
Open AccessYes