Leverage and firm performance: Empirical evidence from Indian food processing industry

Sasikanta Tripathy; Abdul Rahman Shaik

doi:10.5267/j.msl.2019.11.035

Leverage and firm performance: Empirical evidence from Indian food processing industry

Sasikanta Tripathy, Abdul Rahman Shaik

Accounting

SRM University-AP

Research output: Contribution to journal › Article › peer-review

20 Scopus citations

Abstract

The current study examines the association between financial performance and leverage for 56 food processing firms listed in BSE over the period 2000-2018 using pooled OLS, fixed effects, and random effects models. The results indicate that leverage was significantly and positively associated with the firm performance. The results obtained are thus robust across the estimation methods. The pecking order theory and the static tradeoff theory, both seem to explain Indian food processing firms’ decisions among the alternative theories of capital structure.

Original language	English
Pages (from-to)	1233-1240
Number of pages	8
Journal	Management Science Letters
Volume	10
Issue number	6
DOIs	https://doi.org/10.5267/j.msl.2019.11.035
State	Published - 2019

Keywords

Firm Performance
Leverage
Panel data model
Pooled OLS Fixed Effect Random Effect Investment theories
Restructuring

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10.5267/j.msl.2019.11.035

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title = "Leverage and firm performance: Empirical evidence from Indian food processing industry",

abstract = "The current study examines the association between financial performance and leverage for 56 food processing firms listed in BSE over the period 2000-2018 using pooled OLS, fixed effects, and random effects models. The results indicate that leverage was significantly and positively associated with the firm performance. The results obtained are thus robust across the estimation methods. The pecking order theory and the static tradeoff theory, both seem to explain Indian food processing firms{\textquoteright} decisions among the alternative theories of capital structure.",

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AB - The current study examines the association between financial performance and leverage for 56 food processing firms listed in BSE over the period 2000-2018 using pooled OLS, fixed effects, and random effects models. The results indicate that leverage was significantly and positively associated with the firm performance. The results obtained are thus robust across the estimation methods. The pecking order theory and the static tradeoff theory, both seem to explain Indian food processing firms’ decisions among the alternative theories of capital structure.

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KW - Panel data model

KW - Pooled OLS Fixed Effect Random Effect Investment theories

KW - Restructuring

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Leverage and firm performance: Empirical evidence from Indian food processing industry

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