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Do debt, and operating efficiency contributes to corporate performance?

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Abstract

This research delves into the interplay between debt efficiency, operating efficiency, and firm performance, utilizing annual data from 2013 to 2019 for Indian-listed companies. Employing the GLS regression model, our findings reveal a significant negative relationship between debt efficiency and the financial performance of Indian firms. Conversely, operating efficiency exerts a notable positive influence on firm performance. Furthermore, our results affirm the significance of control variables such as sales growth, firm size, non-promoter shareholdings, and debt-equity ratio in shaping financial performance. This study underscores the pivotal role of an optimal capital structure mix in enhancing financial performance, particularly pertinent in India, where many firms are family-owned and heavily reliant on debt financing. Consequently, these findings hold valuable insights for investors making decisions within the context of family-owned firms in India.

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Correspondence to Prince Bhatia.

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Bhatia, P., Kumar, R. Do debt, and operating efficiency contributes to corporate performance?. Int J Syst Assur Eng Manag 15, 1203–1209 (2024). https://doi.org/10.1007/s13198-023-02206-6

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  • DOI: https://doi.org/10.1007/s13198-023-02206-6

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