Role of Firm Size in determination of Capital Structure of the Firm

Abstract

This study aims to examine how factors affect the capital structures of both small and large non-financial enterprises. This study uses Random, OLS and GMM model to explain the relationship. For this a sample of 200 non-financial firms for 10 years from 2010 to 2019 were taken. The results would be suggesting that various firm characteristics play a vital role in determining capital structure of a firm. Firm profitability, Liquidity and Tangibility have a negative relationship significantly, while Inflation and Firm Size showed positive relationship with leverage ratio.