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Determinants of Financial Structure of Iranian Companies Listed in Tehran Stock Exchange: A Structural Equation Modeling Approach

Document Type : Research Paper

Authors

1 Associate prodessor, University of Shahid Bahonar Kerman

2 Academic member, University of Vali Asr Rafsanjan

Abstract

This paper applies the structure equation modeling approach to investigate the determinants of financial structure of Iranian companies listed in Tehran Stock Exchange. In addition, this study tries to unravel the financial structure determinants relative impact. The period of this research is start from 1379 to end of 1386. This study uses a MIMIC model of structure equation modeling to examine the financial structure determinants. We examine the effect of seven firm factors, which are growth, collateral value of assets, profitability, volatility, firm size, and industry classification on the latent financial structure. With the financial structure measured simultaneously by the ratios of short-term debt, and long-term debt to the market value of equity, our results show that collateral value is the most important in financial structure determinaion, followed in order by, firm size, profitability, growth, volatility, and Industry classification. Moreover, we find that short-term debt is the most important proxy for financial structure.

Keywords

References
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Economics Research
Volume 12, Issue 45 - Serial Number 2
July 2012
Pages 75-98
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History
  • Receive Date: 27 April 2015
  • Accept Date: 27 April 2015
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