Impact of Capital Structure Determinants on Paper and Board Sector in Pakistan

Abstract

This study makes an attempt to observe the capital structure of paper and board sector’s listed companies in Pakistan. Study discloses that capital structure determinants of particular industry has unique features or characteristics which are usually not cleared by combined analysis of various industries, because capital structure determinants are firm-specific and vary industry to industry. This study has used sample data for the period of 2006-2011 of paper and board sector and panel regression is used for panel data analysis, and results shows that five explanatory variables profitability, tangibility, size, non-debt tax-shield and growth level explains 76% variations in leverage level which is dependent variable, further profitability, growth and firms size have positive relation and also have significant impact on leverage, while tangibility and non-debt tax shield has negative relation and their impact is insignificant on dependent variable.