South Asian Firms Pre and Post Covid-19 Capital Structure Behaviour


  • Mumtaz Ahmed Department of Management Sciences, University of Turbat
  • Muhammad Waris University of Turbat
  • Mehran Department of Commerce, University of Turbat


Capital structure, Target leverage, Speed adjustment, Economic recovery, Two stage regression


This study aims to identify the capital structure speed adjustment of South Asian firms, post Covid 19 crisis period. Using a total sample firms of 685 observations, the study found that the speed adjustments of Indian and Pakistani firms are 11.88% and 17.25 %, respectively. On average, Indian firms take 4.21 years to adjust partially whereas it is 2.9 years for firms in Pakistan. Secondly, this paper examines the regional variation among South Asian countries adjustment speed and the determinants which affect this speed. To examining the post-global Covid 19 crisis behavior (economic recovery period) of firm’s capital structure in the South Asian market, this study to our best knowledge is the first attempt to understand the regional macroeconomic variation in the capital structure. The Two-stage linear regression estimator is used due to its reliability over other estimation methods.  The analysis provides an understanding that how economic stimulus packages affect the adjustment speed of capital structure in India, but its effect in Pakistan is not significant. It also shed lights on the other variables like size, profitability, tangibility, and GDP that affect the financial leverage and the speed of adjustment towards target leverage.




How to Cite

Ahmed, M., Waris, M., & Mehran. (2023). South Asian Firms Pre and Post Covid-19 Capital Structure Behaviour. Journal of Business Studies and Economic Research, 1(1), 21–35. Retrieved from




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