The focus of this study is to identify the determinants of corporate liquidity for a sample of 100 firms in the Indian market. The study uses panel data pertaining to two sectors viz., textile and chemical sector undertakings over the period 1999–2008 and employs the backward stepwise regression and correlation. The results indicate that the variables like cash flow, debt ratio, and free cash flow are significant determinants of corporate liquidity for all the sectors under consideration. In addition it has been observed that Size of firm has no impact on liquidity.
Size of firm, Panel data, Liquidity, Backward stepwise Multiple regression, correlation
