Literature Review on Determinants of Capital Structure

Now researcher presents a brief discussion on the factors that may have an effect on the firm's debt-equity choice. Various researchers have taken different variables to test capital structure. According to Titman and Wessels (1988), these factors are tangibility of assets, size, growth opportunities, profitability, non-debt tax shields, earnings volatility, uniqueness, and industry classification. But Harris and Raviv (1991), includes advertising expenditure and Research & development (R&D) expenditure in these factors list.