IJSSH 2012 Vol.2(5): 421-426 ISSN: 2010-3646
DOI: 10.7763/IJSSH.2012.V2.138

Diversification Strategy and Its Influence on the Capital Structure Decisions of Manufacturing Firms in India

Ranjitha Ajay and R. Madhumathi

Abstract—Indian corporate sector over the last two decades have experienced major policy changes after the initiation of certain measures of financial liberalization. As a result many companies have started diversifying their business and there is a significant increase in foreign direct investment (FDI) inflows as well as outflows. Against this background the research examines the impact of diversification strategies (international market and product diversification) on the leverage decisions of firms after controlling for other major determinants of capital structure.

Index Terms—Capital structure, international market diversification, product diversification

The authors are with Indian Institute of Technology, Madras (e-mail:ranjithaajay07@gmail.com )

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Cite: Ranjitha Ajay and R. Madhumathi, "Diversification Strategy and Its Influence on the Capital Structure Decisions of Manufacturing Firms in India," International Journal of Social Science and Humanity vol. 2, no. 5, pp. 421-426, 2012.

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