An empirical study on board independence and capital structure choices in non-financial listed firms in India with a spotlight on institutional investors as moderators

Asha Elizabeth Thomas and Amiya Bhaumik

Global Business and Economics Review, 2026, vol. 35, issue 1, 1-20

Abstract: The research was carried out to fill the gap in different views of how board independence affects listed companies' capital structures. Researchers have attempted to solve the already available literature discrepancies by studying how an independent board can alter a company's capital structure. This research also studies the impact of institutional investors on the relationship between a company's leverage and board independence. The research examined a balanced panel sample of Indian companies listed on the Bombay Stock Exchange (BSE) and formed part of the BSE 200 Index from 2015 to 2021. The final sample for the research, which included 840 observations including data about 140 companies were obtained after removing missing figures. Financial firms were not included in the final set since they have a different set of regulations regarding their capital structure. The research findings suggest a highly significant negative relationship between board independence and the firm's capital structure. The research also confirms the advantageous and significant role of institutional investors in the capitalisation decisions made by non-financial listed companies in India. Besides, the findings prove statistically that a larger proportion of institution ownership in firms enhances the role of independent directors on financial strategies shaping for Indian companies.

Keywords: corporate governance; CG; board independence; capital structure; agency theory; institutional investors; emerging economies; Indian capital market. (search for similar items in EconPapers)
Date: 2026
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