The Relationship between Ownership Structure and Capital Structure

Evidence from Chemical Sector of Pakistan

  • Sadia Murtaza
      National College Of Business Administration & Economics, Lahore, Pakistan
    • Irsa Azam
        University of Gujarat, Pakistan

      Abstract

      Objective – The main objective of this study is to measure the relationship between ownership structure and capital structure by using the chemical sector of Pakistan.

      Design – This study is used the panel data and retrieved from the annual reports of the chemical sector of Pakistan for the time period of 2012 to 2017.

      Findings – The finding the statistical analysis shows that ownership structure has a significant positive relationship on capital structure. Which mitigate the agency conflicts among managers and shareholders, because the majority of the shareholders would like to have a higher level of debt over equity financing.

      Policy Implications – The findings of this study also can be helpful to the policymakers, investors and financial institution in designing ownership structures and financing decisions for firms. 

      Originality – This is the first study that examined the relationship between ownership structure and capital structure in the context of the chemical sector of Pakistan.

      Keywords:
      Ownership Sturcture Capital Structure Profitability Pooled OLS Chemical Sector

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      Article History
      Received: 2019-05-10
      Published: 2019-06-01
      How to Cite
      Murtaza, S., & Azam, I. (2019). The Relationship between Ownership Structure and Capital Structure. SEISENSE Journal of Management, 2(4), 51-64. https://doi.org/10.33215/sjom.v2i4.162