Submitted:
10 May 2026
Posted:
13 May 2026
You are already at the latest version
Abstract
The paper seeks to find the direct and indirect association amongst capital structure and firm value among all the nonfinancial firms listed in PSX from (2014-2019). Secondary panel data was used to conduct analysis. Structural equation modelling technique in Stata was used to estimate the direct effects. MedSEM, a special package for Stata, was used to estimate the indirect effects. Results showed that capital structure had no direct effect on value of the firm, but financial distress mediated the association amongst capital structure and value of the firm. Substantial indirect effect clearly manifests the existence of indirect nature of association amongst capital structure and value of the firm.
Keywords:
capital structure
; firm value
; MedSEM
; financial distress
; firm size
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