IMPACT OF CAPITAL RESTRUCTURING ON FIRM PERFORMANCE: AN EMPIRICAL STUDY USING PANEL DATA ANALYSIS
DOI:
https://doi.org/10.29121/shodhkosh.v7.i9s.2026.8003Keywords:
Capital Structure Adjustment, Panel Data Regression, Financial Performance Indicators, Leverage Dynamics, Econometric AnalysisAbstract [English]
Capital restructuring plays a critical role in shaping a firm’s financial stability and long-term performance, particularly in dynamic and competitive markets. This study empirically examines the impact of capital restructuring on firm performance using a panel data framework. Drawing on firm-level data over multiple years, the analysis captures both cross-sectional and time-series variations to provide robust and generalizable insights. Key financial indicators such as return on assets (ROA), return on equity (ROE), and market-based measures are used to evaluate performance, while capital restructuring is proxied through changes in leverage, debt composition, and equity adjustments.The study employs fixed and random effects models to control for unobserved heterogeneity, along with diagnostic tests to ensure model validity. The findings indicate that capital restructuring has a statistically significant impact on firm performance; however, the direction and magnitude of this effect vary depending on the nature and extent of restructuring. Moderate adjustments in capital structure tend to enhance operational efficiency and profitability, whereas excessive reliance on debt may adversely affect financial outcomes due to increased risk and financial burden
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Copyright (c) 2026 Dr. Shivali C. Shah, Dr. Hardita Dhamelia, Dr. Khushboo Jodawat, Dr. Vivek Patadiya
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