Relationship between competition of product's market and Agency cost

Competition in market is effective factors in order to reduce problems of agency cost and improves agency cost. Fama (1980) believed that, companies try increase wealth of stockholders and ownerships and it leads to reduce value of companies. Aim of this research investigating effect of competitive market in companies listed at Tehran stock exchange on agency cost. We used linear regression on 77 companies listed at Tehran stock exchange during 2006 and 2011. Findings of research indicated that significant relationship exists between index of Herfindal-Hershmin and ratio of operational cost to sale. Furthermore, there was not significant relationship between Herfindal-Hershman and ratio of assets turnover as well as there was not significant relationship between Herfindal-Hershman (HHI) and agency cost. Moreover, there was not significant relationship between index of Herfindal-Hershman opportunity growth and free cash flow. There was significant relationship exists between central ratio of n (CRn) and ratio of operational cost to sale; whereas, there was not significant relationship between central ratio of n (CRn) and ratio of assets turnover. Significant relationship exists between central ratio of n and opportunity growth and finally there was not relationship between central ratio of n (CRn) and intraction between opportunity costs and free cash flow.