LITERATURE REVIEW

1. Anshu Handoo and Kapil Sharma (2014) in their study “A study on determinants of
capital structure” identifies the most important determinants of capital structure of
Indian firms comprising both private and government companies. The study
concludes that factors such as profitability, growth, asset tangibility, size, cost of debt,
tax rate have significant impact on the leverage of the companies. The study was an
empirical study based on well-known capital structure theories.

2. Harsh Purohit and Shivi Khanna (2012) in their study “Determinants of Capital
Structure in Indian Manufacturing Sector” attempts to study the various determinants
used in the Indian manufacturing industry. The study concludes that the assets are
negatively related to the leverage.

3. Bhag Singh Bodia (2017) in his study “Determinants of Capital Structure-A Study of
Selected Pharma Companies” studies the significant determinants of listed
Pharmaceutical companies. Multiple regression study was carried out for selected
companies and variables like capital density, debt service capacity, cashflow coverage
ratio were found to be the most significant determinants of pharmaceutical companies.

4. Berhe and Kaur (2017) in their study identifies the key factors that affected the
profitability of insurance companies in Ethiopia. ROA was the measure of
profitability used and the results of the study indicated that the size of insurance,
capital adequacy, liquidity ratio and real growth of GDP are the key factors that affect
the profitability of insurance companies.

5. KaushikBasu and Meenakshi Rajeev (2013) researches whether capital market

regulations exert any control on the capital structure decisions of Indian corporate firms.
The results suggest that capital market regulations have adverse impact on the use of
public debt and positive impact on the use of equity capital.
6. Mishra, Chandra Sekhar. Gupta,Vinod.(2011). Determinants of capital structure - A
study of a manufacturing sector PSUs in India. In their study they identified the
determinants of Indian central PSU's capital structure . The results suggest that the
capital structure (Total Borrowing to Total Assets) of the profit making PSUs is affected
by Asset Structure (Net Fixed Assets to Total Assets, NFATA), Profitability (Return
on Assets, ROA) and Tax. Unlike suggestion of pecking order hypothesis, growth
(defined as growth in total assets) is positively related to leverage.

7. Gill, Amarjit. Biger, Nahum. Pai2,Chenping. Bhutani,Smita. (2009).The Determinants

of Capital Structure in the Service Industry: Evidence from United States. The Open
Business Journal, DOI: 10.2174/1874915100902010048. Their study is regarding
determinants of capital structure which is an extension to the findings of Biger,
Nguyen, and Hoang’ (2008). It is an empirical study and the results suggest that
leverage is negatively related to the firm's profitability.

8. Banerjee,Arindam.De,Anupam.(2014).Determinants of Corporate Financial

Performance Relating to Capital Structure Decisions in Indian Iron and Steel Industry:
An Empirical Study. Their study is to investigate factors (independent variables) on
which the dependent variable profitability depends upon for the firms belonging to the
Indian Iron and Steel industries and also to examine determinants of financial
performance during pre- and post- recession periods.

9. Harris,Milton. Raviv,Artur (1990). Capital structure and informational role of debt.

their research states that the optimal structure is obtained through a trade-off between
liquidation decisions and higher investigation costs. They concluded that high leverage
can be an outcome with large firm value, lower probability of reorganization following
default and higher debt level.

10. Rajan & Zingales (1995) found levels of leverage across the G7 group of countries.
This is a surprising result because it has been usually asserted that firms in bank
oriented countries are more levered than in market-oriented countries. They also show
that the determinants of the capital structure that have been previously reported for
U.S. data are equally important in other G-7 countries.