Influence of Capital Gearing on Firm Value Empirical Evidence from Indian Transport & Logistics Sector

Dr. Mahesh R ., Mr. Prasad V. Daddikar .

Abstract


The transport and logistics sector is an essential contributor for the development of a country. Since the new economic reforms initiated in 1991, the transportation infrastructure of India has witnessed a paradigm change. The need for transport & logistics services grew at an annual rate of 10%, in the last decade the demand in the transport and logistics sector grew along with the accelerating Indian GDP. This development augmented the demand for capital investment by firms’ to enhance the transport & logistics infrastructural facilities to support the growth of manufacturing, trading and service sector of Indian economy. Generally transport & logistics sector firms’ are capital intensive and require substantial commitment of capital resources in order to function efficiently. The objective of this research paper is to determine whether in Indian transport & logistics sector, an increase in capital gearing positively or negatively influences the firm value. This research paper has used secondary data sourced from the money control database for the period 2001-2012. The sample firms selected for this research paper were listed on BSE & NSE and firms were stratified into transport & logistics sector. The present study employed correlation and regression tests to prove the postulated hypothesis using SPSS to ascertain the influence of capital gearing on firm value. Finally, the overall findings indicate that there is no significant influence of capital gearing on firm value. The study also concludes that there might be other non- quantitative factors which may lead to nullify the influence of capital gearing on firm value.


Keywords


Transport & Logistics, Capital Gearing, Firm Value, Capital Structure, Regression Analysis, Stakeholders etc

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