Moderating impact of corporate governance on capital structure and corporate performance : An energy sector

Parwani, Ashwin H.; Movalia, Nilesh; Dave, Tejas; Modasiya, Soaeb Mohammed; Singh, Prateek; Sharma, Kishan Nareshkumar

doi:10.47974/JSMS-1494

Open Access Research Article

Moderating impact of corporate governance on capital structure and corporate performance : An energy sector

^*Ashwin H. ParwaniCorresponding authorparwaniashwin84@gmail.comDepartment of Business AdministrationSchool of Liberal StudiesPandit Deendayal Energy UniversityGandhinagar, Gujarat, 382426, India0000-0001-5825-233XView full profile → , Nilesh MovaliaNilesh.Movalia@sls.pdpu.ac.inDepartment of Business AdministrationSchool of Liberal StudiesPandit Deendayal Energy UniversityGandhinagar, Gujarat, 382426, India0000-0002-2517-2752View full profile → , Tejas DaveTejas.Dave@sls.pdpu.ac.inDepartment of Business AdministrationSchool of Liberal StudiesPandit Deendayal Energy UniversityGandhinagar, Gujarat, 382426, India0009-0008-2518-4332View full profile → , Soaeb Mohammed Modasiyamodasiyasoaeb@gmail.comDepartment of Business AdministrationSchool of Liberal StudiesPandit Deendayal Energy UniversityGandhinagar, Gujarat, 382426, India0009-0001-3670-8356View full profile → , Prateek SinghPrateek.Singh@sls.pdpu.ac.inDepartment of Business AdministrationSchool of Liberal StudiesPandit Deendayal Energy UniversityGandhinagar, Gujarat, 382426, IndiaView full profile → , Kishan Nareshkumar Sharmakishan.sharma2528@gmail.comDepartment of Business AdministrationSchool of Liberal StudiesPandit Deendayal Energy UniversityGandhinagar, Gujarat, 382426, IndiaView full profile →

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pp. 77–99Vol. 29Issue 1January 2026DOI: 10.47974/JSMS-1494XML

Received:: 05 Mar 2025
Published Online:: 01 Jan 2026
Article type:: Research Article
Language:: EN
Article no.:: JSMS-1494
Pages:: 77–99

Abstract

The present study examines the role of capital structure on financial performance of energy sector companies in a major emerging economy. By concentrating on the moderating effect of corporate governance practices on ownership structure and corporate performance, it closes a gap in the research. It uses energy companies financial data for a period of 10 years (2014-2023), employing panel regression approach using fixed-effect estimation. Debt-equity ratio, debt-asset ratio has been considered for measuring capital structure whereas return on assets has been taken as proxy of financial performance. The results were validated using GMM model (Generalized Method of Moments) to control for potential endogeneity. Corporate governance has been measured by size of Board, , CEO duality, board independence, and size of audit committee. Based on regression results, the study finds a substantial detrimental impact of capital structure on performance of business. Further, the moderation analysis has revealed mixed results as board size and independence positively moderates performance of firm and capital structure whereas CEO duality and audit committee have negative moderating effect. The current study provides significant implications for management and extends literature on debt financing and corporate performance particularly the underexplored corporate governance’s role.

Keywords

Corporate governance Capital structure Moderating effect Energy

Subject Classifications

91G50

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