Reviewing Influential Factors on Capital Structure of Firms Listed in Tehran Security Exchange with Emphases on Production Market Competition

Document Type : Research Paper

Authors

1 Associate Prof. in Accounting, University of Tarbiat Modares, Tehran, Iran

2 MSc. in Accounting, University of Sistan & Balouchestan, Zahedan, Iran

Abstract

This study examines the relationship between product market competition and other factors affecting the capital structure of listed companies in Tehran stock exchange. The main objective of this study is to identify the effect of market competition on financial leverage (debt absorption) along with other factors affecting the company total debt absorption. Study period is 5-year from 1385 to 1389. To determine product market competition as the independent variable, Tobin’s Q ratio is used. The dependent variable used to calculate the capital structure is financial leverage ratio which is equal to total debt to total assets ratio. Other independent variables, as other effective factors on capital structure such as profitability, firm size, collateral value of assets, the company's growth, non-debt tax shields, uniqueness of assets is the ability to generate internal resources and current ratio. In this study of 178 companies (890 years - co) used as a sample and to test the research hypotheses pool/panel regression is used in both static and dynamic. Results shows that in static model, profitability effect, inventory ratio to fix assets divided by total assets and current ratio to capital structure is negative and significant and product market competition and also non debt tax shield to capital structure is positive and significant. In dynamic model, profitability effect, inventory ratio to fix assets divided by total assets and current ratio to capital structure is negative and significant and product market competition and also non debt tax shield to capital structure is positive and significant.

Keywords

References

اشر­ف­زاده، ح.، و مهرگان، ن. (1387). اقتصادسنجیپانلدیتا، تهران: مؤسسه تحقیقات تعاون.##
باقرزاده، س. (1382). تبیین الگوی ساختار سرمایه شرکت‌های پذیرفته‎شده در بورس اوراق بهادار تهران. تحقیقات مالی ، 5 (2): 47- 23.##
پورحیدری، الف. (1374). بررسی عوامل تعیین‎کنندۀ ساختار مالی شرکت‌های پذیرفته‎شده در بورس اوراق بهادار تهران. پایان‎نامه کارشناسی ارشد مدیریت، دانشگاه تهران.##
حاجی­پور، ب.، و مؤمنی، م. (1388). بازشناسی رویکرد منبع محور نسبت به منابع سازمان و مزیت رقابتی پایدار. اندیشه مدیریت، 3 (1): 102-77.##
ستایش، م.، و جمالیان­پور، م. (1390). سودمندی ساختار سرمایه و تغییرات آن بر پیشبرد راهبردهای مالی شرکت­های پذیرفته‎شده در بورس اوراق بهادار تهران. بررسی­های حسابداری و حسابرسی ، 18 (64): 90- 73.##
ستایش، م. و کارگرفرد جهرمی، م. (1390). بررسی تأثیر رقابت در بازار محصول بر ساختار سرمایه. پژوهش­های تجربی حسابداری مالی ، 1 (1): 31- 9.##
ستایش، م.، کاظم­نژاد، م. و شفیعی، م. (1388). کاربرد الگوریتم ژنتیک در تعیین ساختار بهینه سرمایه شرکت­های پذیرفته‎شده در بورس اوراق بهادار تهران. بررسی­های حسابداری و حسابرسی، 16 (56): 58-39.##
سینایی، ح. (1386). بررسی تأثیر عوامل داخلی شرکت­ها بر چگونگی شکل­گیری ساختار سرمایه شرکت‎های عضو بورس اوراق بهادار تهران. بررسی­های حسابداری و حسابرسی، 14 (48): 84-63.##
نمازی، م. و شیرزاد، ج. (1384). بررسی رابطه ساختار سرمایه با سودآوری شرکت­های پذیرفته‎شده در بورس اوراق بهادار تهران. بررسی­های حسابداری و حسابرسی، 12 (42): 95- 75.##
Akhtar, S. (2005). The Determinant of Capital Structure for Australian Multinational and Domestic Corporations. Australian Journal of Management, 3.##
Barclay, M. J., & Smith, C. W. (1996). On financial architecture: Leverage, maturity and priority. Journal of Applied Corporate Finance, 8(4): 4−17.##
Bolton, P. & Scharfstein, D. S. (1990). A theory of predation based on agency problems in financial contracting. The American Economic Review, 80(1): 93−106.##
Booth, L. & Aivazian, A. & Demirguc & Maksimovic. (2001). Capital Structure I Developing Countries. The Journal of Finance, 1: 87-130.##
Bradley, M. & Jarrell, G. & Kim, E. H. (1984). On the Existence of an Optimal Capital Structure: Theory and Evidence. Journal of Finance, 39: 857-878.##
Brander, A. & Lewis, R. (1986). Oligopoly and Financial Structure: The Limited Liability Effect. American Economic Review,76: 956-970.##
Campello, M. (2003). Market share, leverage, and competition: theory and empirical evidence. Working paper, University of Illinois.##
Chang, C. & Lee, A. & Lee, C. (2009). Determinants of capital structure choice: A structural equation modeling approach. The Quarterly Review of Economics and Finance, 49: 197-213.##
Chen, J. & Strange, R. (2005). The Determinants of Capital Structure: Evidence from Chines Listed Companies. Economic Change and Restructuring, 38: 11-35.##
Chen, J. (2004). Determinants of Capital Structure of Chinese Listed Companies. Journal of Business Research, 57: 1341– 1351.##
Chung, K. & Pruitt, S. (1994). A simple approximation of Tobin’s Q. Financial Management, 23: 70-74.##
De Angelo, H. & De Angelo, L. (2006). Capital Structure, Payout Policy, and Financial Flexibility. Working Paper No. FBE 02-06, Marshall School of Business, University of Southern California, Available at SSRN: http://ssrn.com/abstract=916093. ##
De Angelo, H. & Masulis, R. (1980). Optimal capital structure under corporate and personal taxation. Journal of Financial Economics, 8(1): 3−29.##
Graham, J., & Lemmon, M. & Schallheim, J. (1998). Debt, Leases, Taxes and the Endogeneity of Corporate Tax Status. Journal of Finance, 53: 131-162.##
Guney, Y. & Li, L. & Fairchild, R. (2011). The relationship between product market competition and capital structure in Chinese listed firms. International Review of Financial Analysis, 2: 41-51.##
Hovakimian, A. & Opler, T. & Titman, S. (2001). The Debt-Equity Choice. Journal of Financialand Quantitative Analysis, 36: 1-24.##
Istaitieh, A. & Rodriguez, J. (2003). Stakeholder Theory, Market Structure, and the Firm’s Capital Structure: an Empirical Evidence. Working Paper, University of Valladolid.##
Istaitieh, A., & Rodriguez, J. M. (2006). Factor-product markets and firm's capital structure: A literature review. Review of Financial Economics, 15(1): 49−75.##
Jensen, C. (1986). Agency Costs of Free Cash Flow, Corporate Finance and Takeovers. American Economic Review, 76, 323-339.##
Jensen, M. C. & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Capital Structure. Journal of Financial Economics, 3: 305-365.##
Lindenberg, E. B., & Ross, S. A. (1981). Tobin's Q ratio and industrial organization. Journal of Business, 54 (1): 1−32.##
Maksimovic, V. (1988). Capital structure in repeated oligopoly. The Rand Journal of Economics, 19(3): 389−407.##
Michaelas, N., Chittenden, F., & Poutziouris, P. (1999). Financial policy and capital structure choice in U.K. SMEs: Empirical evidence from company panel data. Small Business Economics, 12(2): 113−130.##
Modigliani, F. & Miller, M. (1958). The cost of capital, corporation finance and the theory of investment. American Economic Review, 53: 433-443.##
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13 (2): 187−221.##
Myers, S.C. (1984). The Capital Structure Puzzle. Journal of Finance, 34: 575-592.##
Myers, S.C. (2001), Capital Structure. Journal of Economic Perspectives, 15 (2).##
Nikolaos, E. & Dimitrios, V. & Zoe, V. (2007). How firm characteristics affect capital structure: an empirical study. Managerial Finance, 33(5): 321-331.##
Opler, T.C. & Titman, S. (1994). Financial Distress and Corporate Performance. Journal of Finance, 49(3): 1015-1040.##
Pandey, I.M. (2004). Capital structure, profitability and market structure: Evidence from Malaysia. Asia Pacific Journal of Economics and Business, 8(2): 78-91.##
Rajan, R & L, Zingales. (1995).What do we know about Capital Structure? Some Evidence from International Data. Journal of Finance, 50: 1421-1460.##
Rathinasamy, R. S., Krishnaswamy, C. R., & Mantripragada, K. G. (2000). Capital structure and product market interaction: An international perspective. Global Business and Finance Review, 5(2): 51−63.##
Titman, S. & Wessels, R. (1988). The determinants of capital structure choice. Journal of Finance, 43(1): 1−19.##
Titman, S. (1984). The effect of capital structure on a firm's liquidation decision. Journal of Financial Economics, 13(1): 137−151.##
##
 

Files

Share

How to cite

Statistics