International Journal of Social Science and Humanity, 2013
Indian corporate sector over the last two decades have experienced major policy changes after the... more Indian corporate sector over the last two decades have experienced major policy changes after the initiation of certain measures of financial liberalization. As a result many companies have started diversifying their business and there is a significant increase in foreign direct investment (FDI) inflows as well as outflows. Against this background the research examines the impact of diversification strategies (international market and product diversification) on the leverage decisions of firms after controlling for other major determinants of capital structure.
Indian corporate sector over the last two decades has experienced major policy changes after the ... more Indian corporate sector over the last two decades has experienced major policy changes after the initiation of certain measures of financial liberalization. As a result many companies have started diversifying their business and there is a significant increase in foreign direct investment (FDI) inflows as well as outflows. Against this background the research examines the impact of diversification strategies (international market and product diversification) on the leverage decisions of firms after controlling for other major determinants of capital structure.
This paper tests traditional capital structure models against the alternative of a pecking order ... more This paper tests traditional capital structure models against the alternative of a pecking order model of corporate financing. The basic pecking order model, which predicts external debt financing driven by the internal financial deficit, has much greater timeseries explanatory power than a static tradeoff model, which predicts that each firm adjusts gradually toward an optimal debt ratio. We show that our tests have the power to reject the pecking order against alternative tradeoff hypotheses. The statistical power of some usual tests of the tradeoff model is virtually nil.
International Journal of Social Science and Humanity, 2013
Indian corporate sector over the last two decades have experienced major policy changes after the... more Indian corporate sector over the last two decades have experienced major policy changes after the initiation of certain measures of financial liberalization. As a result many companies have started diversifying their business and there is a significant increase in foreign direct investment (FDI) inflows as well as outflows. Against this background the research examines the impact of diversification strategies (international market and product diversification) on the leverage decisions of firms after controlling for other major determinants of capital structure.
Indian corporate sector over the last two decades has experienced major policy changes after the ... more Indian corporate sector over the last two decades has experienced major policy changes after the initiation of certain measures of financial liberalization. As a result many companies have started diversifying their business and there is a significant increase in foreign direct investment (FDI) inflows as well as outflows. Against this background the research examines the impact of diversification strategies (international market and product diversification) on the leverage decisions of firms after controlling for other major determinants of capital structure.
This paper tests traditional capital structure models against the alternative of a pecking order ... more This paper tests traditional capital structure models against the alternative of a pecking order model of corporate financing. The basic pecking order model, which predicts external debt financing driven by the internal financial deficit, has much greater timeseries explanatory power than a static tradeoff model, which predicts that each firm adjusts gradually toward an optimal debt ratio. We show that our tests have the power to reject the pecking order against alternative tradeoff hypotheses. The statistical power of some usual tests of the tradeoff model is virtually nil.
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Papers by ranjitha ajay