Determinants of Capital Structure of the Cement Industry in Pakistan
The study attempts to determine the capital structure of the listed firms in the cement industry of Pakistan for a period of 2004 to 2013. For this purpose the panel data were used by applying the fixed effects model. The study concludes that the capital structure of a single industry have some unique attributes which are usually not present in the analysis of many combined industries as done by Shah and Hijazi (2005). The study used the data of 14 firms out of 20 of the cement industry of Pakistan listed at Karachi Stock Exchange and applying the fixed effects model. The study uses the five explanatory variables i.e. Profitability, Firm Size, Tangibility of Assets, Non-Debt Tax Shield (NDTS) and Growth to determine their effect on firm Leverage. The study concludes that profitability, firm size and growth have statistically significant relationship with leverage, however this relationship is negative. The only one explanatory variable tangibility has a significant as well as a positive impact on leverage. However the NDTS has negative and insignificant impact on leverage.