Determinants of capital structure in automobile companies in India

The motive of the study is to examine the determinants of capital structure in automobile companies in India. The sample consists of five commercial vehicle manufacturers. The study used five years time data from 2013-14 to 2017-18. This study has been constructed with the strength of analytical examination of financial data. The selection of suitable dependent and independent variable is computed on the basis of the earlier seminal work in capital structure. The ADF, correlation, regression, and efficiency analyses have been performed to analyze the data collected. Results revealed that financial performance has been influenced by raw material supply, constant price, and policies of management, marketing strategy, business planning, profitability, turnover potential, and productivity. Capital structure is mostly determined by growth rate, size of the firm, non-debt tax shield, and business risk is not statistically significant, but tangibility and profitability ratio are statistically significant. Operational efficiency of automobile companies mainly influenced by profitability and productivity aspects.