Financial sources, capital structure and performance of social enterprises: empirical evidence from India

Tirumalsety, R and Gurtoo, A (2021) Financial sources, capital structure and performance of social enterprises: empirical evidence from India. In: Journal of Sustainable Finance and Investment, 11 (1). pp. 27-46.

PDF jou_sus_fin_11-1_27-46_2021.pdf - Published Version Restricted to Registered users only Download (2MB) | Request a copy

Abstract

The paper examines the influence of financial sources on capital structure–operationalised through the ratio of financial debt to total assets–of social enterprises, followed by the relationship between financial debt and performance. Data on income distribution, financial sources, and financial statements are collected from 207 social enterprises in four states of India–Karnataka, Telangana, Maharashtra, and Tamil Nadu–through cluster sampling. Multiple regression and panel data analysis tests are conducted to study the research objectives. The findings indicate social enterprises prefer debt from donors for capital investments over impact investments as well as debt from formal institutions. Furthermore, financial debt has a negative influence on return on capital employed component of social enterprises performance. Financial debt has no influence on financial results and suggests the independence of social enterprises from the funders. Furthermore, social enterprises’ ability to use capital efficiently to generate returns may be negatively affected by the repayment of interest and loans to lenders.

Item Type:	Journal Article
Publication:	Journal of Sustainable Finance and Investment
Publisher:	Taylor and Francis Ltd.
Additional Information:	The copyright for this article belongs to Taylor and Francis Ltd.
Keywords:	capital structure; financial performance; financial sources; Social enterprises
Department/Centre:	Division of Interdisciplinary Sciences > Management Studies
Date Deposited:	22 Feb 2023 04:28
Last Modified:	22 Feb 2023 04:28
URI:	https://eprints.iisc.ac.in/id/eprint/80495

Actions (login required)

View Item