An Empirical Investigation on the Association between the Leverage of Indian Unicorn Firms and Their Financial Performance

The present research attempts to investigate how leverage affects the unicorn startup's performance in India by employing the panel data methodology. For this study a sample of 25 unicorns is selected from the list of unicorns belonging to two startup hubs, first one is Delhi -NCR and second Bangalore, spanning the years 2016-2017 to 2020-2021. The findings revealed that leverage has significantly reduced startup performance as indicated by the financial ratios return on assets and return on equity. The other firm-specific variables such as firm age and liquidity are found to be playing a significant role in influencing the firm performance specifically if it is calculated through return on assets. The present study will enrich the body of literature by providing the groundwork for further studies in this area.. Moreover, it will also help the potential entrepreneurs, small business owners and managers in taking their financial decision efficiently which will consequently help in improving their financial performance for their long run survival.