Existing studies disagree over the core predictors of firm-level financial choices in developing countries. The general practice only validates the traditional capital structure model, which leads to inconsistency and a lack of novelty. This study removed overfitting issues among existing factors and presented the most reliable and advanced capital structure model in Pakistani firms. The panel data include 368 Pakistani companies from 19 non-financial sectors over the period 2004 to 2017. We apply Akaike and Bayesian Information Criteria to remove overfitting issues among inconsistent proxies in the capital structure model. The fixed effects regression is used for basic results and the Generalized Method of Moments is applied to control the endogeneity. Besides the conventional proxies, we report that credit rating, distance from bankruptcy, managerial concentration, and institutional quality are the most advanced capital structure determinants in Pakistan. These predictors remain significant across firm size and growth levels. Also, the findings confirm that new predictors are reliable to define capital structure dynamics and improve the speed of adjustment in overall and sub-sample analysis. The major findings suggest that managers and policymakers should consider these advanced predictors to design their financial settings in firms.

Abstract
1. Introduction
2. Literature Review
    2.1. Institutional Quality
    2.2. Credit Rating
    2.3. Distance from Bankruptcy
3. Material and Methods
    3.1. Variable Measurement
    3.2. Econometrics Specifications
    3.3. Research Methodology
    3.4. Data Source
4. Results
    4.1. Descriptive Statistics
    4.2. Correlation Matrix and Variance InflationMatrix
    4.3. Reliable Predictors and Overfitting Issues
    4.4. Firm-specific Features and Capital StructureDeterminants
    4.5. Reinforcement of Minor Predictors in FullRegression
    4.6. Core Predictors and Speed of Adjustment
4. Conclusion
References
Endnotes

• Zahoor AHMAD(School of Management and Economics, Beijing Institute of Technology)
• Liu JING(Henan University of Economics and Law)
• Faisal MAHMOOD(School of Economy and Management, Harbin Institute of Technology)
• Luo FUKAI(School of Economy and Management, Harbin Institute of Technology)
• Umeair SHAHZAD(Department, Management College, Ocean University of China) Corresponding Author.