Capital structure and profitability of firms in the corporate sector of Pakistan

Sana Tauseef () and Heman D. Lohano
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Heman D. Lohano: Institute of Business Administration, University Road, Karachi

Business Review, 2017, vol. 12, issue 1, 50-58

Abstract: We examine the impact of debt ratios on returns on equity based on panel data for 179 companies from the non-financial corporate sector of Pakistan for the years 2000 to 2015. The least squares fixed effects estimator reveals that the debt ratio has a significant positive effect on return on equity up to an optimal debt level of 40 percent beyond which it has a significant negative effect.

Keywords: Panel; data; ·; Debt; financing; ·; Profitability; ·; Pakistan; ·; Non-financial; firms. (search for similar items in EconPapers)
Date: 2017
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