IDEAS home Printed from https://ideas.repec.org/a/aii/ijcmss/v5y2014i2p73-81.html
   My bibliography  Save this article

Dete rminants of Capital Structure of Iranian Companies Listed in Tehran Stock Exchange: A Structural Equation Modeling Approach

Author

Listed:
  • Nasrin Yousefzadeh

    (Lecturer, Department of Accounting, Vali-e- Asr University of Rafsanjan, Iran.)

  • Zeinab Aazami

    (Lecturer, Department of Accounting, Faculty of Management and Economics of Baft, Shahid Bahonar University of Kerman, Kerman, Iran.)

  • Hilda Shamsadini

    (Department of Accounting, Islamic Azad University, Bam Branch, Iran.)

  • Mina Abousaiedi

    (Department of Accounting, Kerman Branch, Islamic Azad University, Kerman, Iran.)

Abstract

The objective of the current research is to study the effective factors on capital structures. In line with achieving this objective, financial information of 97 companies, accepted in Tehran Stock Exchange during the research period (2003 to 2011) was analyzed using the structural equations approach. In the current study, in order to measure the capital structure, we used from the long-term debts to assets market value ratio and studied the influence of the variables including growth, uniqueness, assets structures, profitability, earnings volatility, size, stock returns and industry classification on capital structure, the results indicated that growth, uniqueness and the profitability has a negative effect on the capital structure, but assets structure and size has a positive effect on the capital structure. The current studies also showed that there is no significant relation between earning volatility, the firm stock returns and the capital structure.

Suggested Citation

  • Nasrin Yousefzadeh & Zeinab Aazami & Hilda Shamsadini & Mina Abousaiedi, 2014. "Dete rminants of Capital Structure of Iranian Companies Listed in Tehran Stock Exchange: A Structural Equation Modeling Approach," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 5(2), pages 73-81, May.
  • Handle: RePEc:aii:ijcmss:v:5:y:2014:i:2:p:73-81
    as

    Download full text from publisher

    File URL: http://scholarshub.net/index.php/ijcms/article/view/214/207
    Download Restriction: no

    File URL: http://scholarshub.net/index.php/ijcms/article/view/214
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    2. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    3. Chang, Chingfu & Lee, Alice C. & Lee, Cheng F., 2009. "Determinants of capital structure choice: A structural equation modeling approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 197-213, May.
    4. repec:bla:jfinan:v:43:y:1988:i:1:p:1-19 is not listed on IDEAS
    5. Bradley, Michael & Jarrell, Gregg A & Kim, E Han, 1984. "On the Existence of an Optimal Capital Structure: Theory and Evidence," Journal of Finance, American Finance Association, vol. 39(3), pages 857-878, July.
    6. Harris, Milton & Raviv, Artur, 1991. "The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
    7. Wald, John K, 1999. "How Firm Characteristics Affect Capital Structure: An International Comparison," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 22(2), pages 161-187, Summer.
    8. Warner, Jerold B, 1977. "Bankruptcy Costs: Some Evidence," Journal of Finance, American Finance Association, vol. 32(2), pages 337-347, May.
    9. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    10. Malcolm Baker & Jeffrey Wurgler, 2002. "Market Timing and Capital Structure," Journal of Finance, American Finance Association, vol. 57(1), pages 1-32, February.
    11. Rajan, Raghuram G & Zingales, Luigi, 1995. "What Do We Know about Capital Structure? Some Evidence from International Data," Journal of Finance, American Finance Association, vol. 50(5), pages 1421-1460, December.
    12. John K. Wald, 1999. "How Firm Characteristics Affect Capital Structure: An International Comparison," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 22(2), pages 161-187, June.
    13. Narasimhan Jegadeesh, 2000. "Long-Term Performance of Seasoned Equity Offerings: Benchmark Errors and Biases in Expectations," Financial Management, Financial Management Association, vol. 29(3), Fall.
    14. Ang, James S & Chua, Jess H & McConnell, John J, 1982. "The Administrative Costs of Corporate Bankruptcy: A Note," Journal of Finance, American Finance Association, vol. 37(1), pages 219-226, March.
    15. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vo, Xuan Vinh, 2017. "Determinants of capital structure in emerging markets: Evidence from Vietnam," Research in International Business and Finance, Elsevier, vol. 40(C), pages 105-113.
    2. Nivorozhkin, Eugene, 2005. "Financing choices of firms in EU accession countries," Emerging Markets Review, Elsevier, vol. 6(2), pages 138-169, June.
    3. Iván Arribas & Emili Tortosa-Ausina & TingTing Zhu, 2021. "Optimal capital structure, model uncertainty, and European SMEs," Working Papers 2021/11, Economics Department, Universitat Jaume I, Castellón (Spain).
    4. Viet Anh Dang, 2011. "Testing Capital Structure Theories Using Error Correction Models: Evidence From The Uk, France And Germany," Post-Print hal-00732527, HAL.
    5. Firano, Zakaria & Filali adib, Fatine, 2022. "Optimal Capital structure and financial stability," MPRA Paper 115790, University Library of Munich, Germany, revised 2022.
    6. Temimi, Akram & Zeitun, Rami & Mimouni, Karim, 2016. "How does the tax status of a country impact capital structure? Evidence from the GCC region," Journal of Multinational Financial Management, Elsevier, vol. 37, pages 71-89.
    7. Suhaila, Mat Kila & Wan Mahmood, Wan Mansor, 2008. "Capital Structure and Firm Characteristics: Some Evidence from Malaysian Companies," MPRA Paper 14616, University Library of Munich, Germany.
    8. Yildirim, Ramazan & Masih, Mansur & Bacha, Obiyathulla Ismath, 2018. "Determinants of capital structure: evidence from Shari'ah compliant and non-compliant firms," Pacific-Basin Finance Journal, Elsevier, vol. 51(C), pages 198-219.
    9. Yarong Chen & Luca Sensini & Maria Vazquez, 2021. "Determinants of Leverage in Emerging Markets: Empirical Evidence," International Journal of Economics and Financial Issues, Econjournals, vol. 11(2), pages 40-46.
    10. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2005. "Company Financial Structure: A Survey and Implications for Developing Economies," Chapters, in: Christopher J. Green & Colin Kirkpatrick & Victor Murinde (ed.), Finance and Development, chapter 12, Edward Elgar Publishing.
    11. Sabiwalsky, Ralf, 2010. "Nonlinear modelling of target leverage with latent determinant variables -- new evidence on the trade-off theory," Review of Financial Economics, Elsevier, vol. 19(4), pages 137-150, October.
    12. Isil Erol & Dogan Tirtiroglu, 2011. "Concentrated Ownership, No Dividend Payout Requirement and Capital Structure of REITs: Evidence from Turkey," The Journal of Real Estate Finance and Economics, Springer, vol. 43(1), pages 174-204, July.
    13. Valeriya Valer’evna Metel’skaya, 2021. "Correlation-and-regression analysis of the influence of macroeconomic factors on capital structure of Russian corporations under crisis conditions," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-34, December.
    14. Harjeet S. Bhabra & Tong Liu & Dogan Tirtiroglu, 2008. "Capital Structure Choice in a Nascent Market: Evidence from Listed Firms in China," Financial Management, Financial Management Association International, vol. 37(2), pages 341-364, June.
    15. Shoaib Khan & Usman Bashir & Hend Abdulhadi Saleh Attuwaijri & Usman Khalid, 2023. "The Capital Structure Decisions of Banks: An Evidence From MENA Region," SAGE Open, , vol. 13(4), pages 21582440231, December.
    16. Huang, Guihai & Song, Frank M., 2006. "The determinants of capital structure: Evidence from China," China Economic Review, Elsevier, vol. 17(1), pages 14-36.
    17. Arosa, Clara Maria Verduch & Richie, Nivine & Schuhmann, Peter W., 2014. "The impact of culture on market timing in capital structure choices," Research in International Business and Finance, Elsevier, vol. 31(C), pages 178-192.
    18. Christopher A. Hartwell & Anna P. Malinowska, 2018. "Firm-Level and Institutional Determinants of Corporate Capital Structure in Poland: New Evidence from the Warsaw Stock Exchange," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 68(2), pages 120-143, April.
    19. Mai, Nhat Chi, 2012. "Market timing, taxes and capital structure: evidence from Vietnam," OSF Preprints t3mvs, Center for Open Science.
    20. Debabrata Datta & Babita Agarwal, 2014. "Corporate Investment Behaviour in India During 1998–2012," Paradigm, , vol. 18(1), pages 87-102, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aii:ijcmss:v:5:y:2014:i:2:p:73-81. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mr. Asif Anjum (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.