Özet:

The financing police is panacea for the company management to incline the value of the firm and decrease the cost of the capital. The basic aim of study is to examine the determinants of leverage of listed companies in the textile industrial sector of Pakistan Stock Exchange during the study period of 2009-2013. The most appropriate model for panel data i.e. fixed effect, random effect and pooled regression model has used but the diagnostic test Hausman, Chow, and Breusch Pagan test select Pooled model for the study. The findings of the study reveal that tangibility and liquidity are significant but negatively related to capital structure. However, size (+), growth (-) and profitability (-) is insignificant determinants of leverage in textile sector of Pakistan. The results of the study support in favour of pecking order theory. The top management of textile sector might consider liquidity and tangibility while making capital structure decision. Keywords: Textile Sector, Pakistan, Capital Structure, Pooled Model, Determinants.

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