Asian Journal of Research in Banking and Finance
  • Year: 2014
  • Volume: 4
  • Issue: 7

Investigating the Moderating Effect of Industry Level Competition on the Relationship between Capital structure and Firm Performance: Empirical Evidence from Companies Listed in Tehran Stock Exchange

  • Author:
  • Abolfazl Ghadiri Moghaddam, Marzieh Roozkhosh, Sara Sahbaei, Mahsa Sadat Tabatabaei, Fatemeh Noori, Fahimeh Seifi, Narges Araghpoor Saravani
  • Total Page Count: 14
  • Page Number: 215 to 228

*Associate Professor, Department of Accounting, Mashhad Branch, Islamic Azad University, Mashhad, Iran

**M.A. Student of Accounting, Department of Accounting, Mashhad Branch, Islamic Azad University, Mashhad, Iran

Online published on 5 July, 2014.

Abstract

The main purpose of this study is investigating the relationship between capital structure and financial performance, paying particular attention to the degree of industry level competition. The sample of this study, includes 111 companies listed in the Tehran Stock Exchange during the period 2009 to 2013 and for processing and testing hypotheses, Estimated Generalized Least Squares (EGLS) method is used. Study results show that leverage, industry Lerner index, and industry concentration (Herfindahl–Hirschman Index) have negative and significant impact on the firm performance. Also, only industry concentration decreases the negative impact of leverage on the firm performance.

Keywords

Capital Structure, Leverage, Industry Level Competition, Firm Performance, Tehran Stock Exchange