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Article type :

journal-article

Author :

Dr. Asifa Maqbool, Dr. Nadia Nazeer, Dr. Aisha Khursheed, Dr. Muhammad Imran Khan

Volume :

4

Issue :

1

Abstract :

This study explores the speed of adjustment by using the data of automobile industry of Pakistan. For analysis purpose, this study used the 11 automobile firms and 110 years’ wise observations for the period of 2011 to 2020. Empirical findings suggest that speed of adjustment for automobile industry is 0.6, which indicates that automobile firm can adjust toward its target less than two years. This finding supports the trade-off theory assumptions. From control variables, only profitability has negative and significant effect on capital structure. This is an indication that more profitable firms belong to automobile sector, less prefer debt in its capital structure. This study contributes in the context of speed of adjustment of listed Pakistan automobile industry firm.