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However since the mid 1980s and early 1990s, the institutional setup under which firms in these countries operated underwent substantial transformation. To quote Bhaduri (2000: p 656) ‘The move towards the free market, coupled with the widening and deepening of various financial markets, including the
capital market, has provided the scope for the corporate sectors to optimally determine their capital structure. Such an environment has also encouraged more meaningful research on the capital structure issue.’ Consequently, the later part of the 1990s and early 2000 witnessed
several attempts to highlight the issue of capital structure choice in developing countries...
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