INFLUENCE OF CAPITAL GEARING ON FIRM VALUE EMPIRICAL EVIDENCE FROM INDIAN TRANSPORT & LOGISTICS SECTOR

Since the new economic reforms initiated in 1991, the transportation infrastructure of India has witnessed a paradigm change. This development augmented the demand for capital investment by firms to enhance the transport and logistics infrastructural facilities to support the growth of manufacturing, trading and service sector of Indian economy. The objective of this research paper is to determine whether in Indian transport and logistics sector, an increase in capital gearing positively or negatively influences the firm value. This research paper has used secondary data sourced from the money control database for the period 2001-2012. The sample firms selected for this research paper were listed on BSE & NSE and firms were stratified into transport and logistics sector. The present study employed correlation and regression tests to prove the postulated hypothesis using SPSS to ascertain the influence of capital gearing on firm value. Finally, the overall findings indicate that there is no significant influence of capital gearing on firm value. The study also concludes that there might be other non-quantitative factors which may lead to nullify the influence of capital gearing on firm value.