Factors that Influence Financial Leverage of Small Business Firms in India

Abstract

The purpose of this study is to find the factors that influence financial leverage of Canadian firms. A sample of 166 Canadian firms listed on the Toronto Stock Exchange for a period of 3 years (from 2008-2010) was selected. This study applied co-relational and non-experimental research design. The results show that financial leverage of Canadian firms is influenced by the collateralized assets, profitability, effective tax rate, firm size, growth opportunities, number of subsidiaries, and industry dummy. This study contributes to the literature on the factors that influence financial leverage of the firm. The findings may be useful for financial managers, investors, and financial management consultants. JEL classification numbers: G32