Factors Influencing Capital Structure: Evidence from the Oil and Gas Industry of Pakistan

Abstract

This study aims to find out the variables to determine the financial leverage of listed Oil and Gas companies of Pakistan. We have found the regression analysis by using the STATA. Variables were taken from the existing literature plus with the new variables of dividend payout and government ownership, which is the major contribution of this study. Results indicate the significant negative impact of dividend payout and state ownership on financial leverage. Liquidity and business risk also have a significant inverse effect on the firm’s financial leverage. Size and growth found to have a significant positive relationship with financial leverage which indicates that large and growing firms tend to go for external financing particularly debt financing than the small and not growing counterpart.