Abstract
AbstractCapital structure is considered one of the most debatable and controversial subjects in corporate finance. However, little is known about capital structure determinants of firms in the South Asian region. This study attempts to address the gap by not only investigate the impact of firm and country‐specific factors on firms' capital structure across the South Asian Association for Regional Cooperation (SAARC) region but also offer a cross‐country comparison. Results reveal significant relationships between tangibility, profitability, liquidity, firm size, stock market development, economic growth and firm leverage, suggesting that firms in the region are more likely to make their capital structure decisions following pecking order theory. We also find significant differences across countries and debt maturities.
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