This paper aims to empirically study the determinants of liquidity of Indian listed firms. To account for profit persistence, we apply a (pooled, fixed and random) effect models to a panel of Indian listed firms that covers the time period from 2010 to 2016. This study consists of 2154 firms operating in Indian market. Liquidity (LQD) of Indian firms is measured by liquid assets to total assets, whereas bank size, capital adequacy, profitability, leverage, and firm age are used as internal determinants. Further, economic activity, inflation rate, exchange rate, and interest rate are the external factors considered. The findings reveal that leverage, return on assets, and firm age are the essential internal determinants that impact the liquidity of Indian listed firms. Furthermore, among the internal determinants, the results indicate that firm size, leverage ratio, return on assets ratio, and firm age are found to have a significant positive association with firms’ LQD, except leverage ratio and firm age has a negative relationship with firms’ LQD. From this result, this article has provides helpful ideas and empirical evidence on the inner and external determinants of the companies mentioned in India is very useful to bankers, analysts, regulators, investors and other stakeholders.

Abstract
 1. Introduction
 2. Literature Review
 3. Research Methodology
    3.1. Sample Size and Data Collection
    3.2. Model Specification
    3.3. Measurement of Variables
 4. Hypotheses
 5. Empirical Results
    5.1. Descriptive Statistics
    5.2. Correlation and MulticollinearityDiagnostics
    5.3. Regression Analysis
    5.4. Robustness Regression
 6. Conclusion and Implications
 References

• Eissa A. AL-HOMAIDI(Department of Commerce, Aligarh Muslim University)
• Mosab I. TABASH(College of Business, Al Ain University) Corresponding Author
• Waleed M. AL-AHDAL(Faculty of Commerce, Banaras Hindu University)
• Najib H. S. FARHAN(Department of Commerce, Aligarh Muslim University)
• Samar H. KHAN(Emirates Canadian University College)