Analyzing the Factors that Influence Capital Investment Decisions: A Case Study of SME's Listed on Bombay Stock Exchange

This research aims to examine the factors that influence the Long term investment decisions of Entrepreneurial firms listed on the Bombay Stock Exchange (BSE). The panel data of the research sample includes 100 entrepreneurial firms listed on the BSE from 2016 to 2021. A total of 20 entrepreneurial firms each were selected randomly from the six different sectors: Steel, Cement, Chemical, Food Processing and Textile. The Generalized Least Square is employed to address econometric issues and to improve the accuracy of the regression coefficients. In this study, the long term investment percentage is a dependent variable whereas liquidity, long term prospects, capital requirement, leverage, sales growth, size and firm risk are independent variables. The model results show that liquidity and sales growth have the same impact on the long term investment decisions of Entrepreneurs in India and the factors like fixed capital intensity, leverage, firm age, firm risks show a weak and insignificant impact on long term investment decisions. These findings are useful for firm administrators and managers to make the right long term investment decisions and these research results are meaningful to long term investment companies.