Document Type : Research Paper


1 Associate Professor of Economics, Allemeh Tabataba’i University, Tehran, Iran

2 Master of Economics, Allameh Tabataba’i University, Tehran, Iran


The strategic decision of determining the optimal capital structure is paramount for corporate managers, given its profound impact on company valuation and shareholder wealth. This study aims to discern the factors influencing capital structure, specifically financial leverage, with a concentrated focus on uncertainties at both the industry and company levels, employing a multilevel panel model. Data spanning a 15-year period from 1387 to 1401 for 151 companies across 26 industries listed on the Tehran Stock Exchange were collected. R software facilitated the estimation of stock price volatility and stock market industry indices, followed by the application of Stata software to estimate the multilevel panel model. The results reveal several key insights: first, industry-level uncertainties exert a significant negative impact on leverage, while company-level uncertainties lack statistical significance. Second, Q-Tobin demonstrates a positive and substantial effect, whereas cash flow, profitability, tangible assets, and the market value-to-book value ratio exhibit negative and significant effects on leverage. Third, accounting for different levels and incorporating a random component in coefficient estimations enhance the model's explanatory power. Therefore, the multilevel panel model proves preferable over the fixed-effects panel model.


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