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
DOI
https://doi.org/10.54784/1990-6587.1048
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Recommended Citation
Tauseef, S., & Lohano, H. D. (2017). Capital structure and profitability of firms in the corporate sector of Pakistan. Business Review, 12(1), 50-58. Retrieved from https://doi.org/10.54784/1990-6587.1048
Submitted
December 21, 2020
Published
January 01, 2017
Included in
Nonprofit Administration and Management Commons, Portfolio and Security Analysis Commons
Publication Stage
Published
