The Relationship between Product Market Competition and Capital Structure of the Selected Industries of the Tehran Stock Exchange
The main objective of this study is to examine the relationship between product market competition and capital structure of the selected industries on the Tehran Stock Exchange. Considering Tobin’s Q and Herfindahl-Hirschman index as the independent variable and the debt ratio as the dependent variable, the research model is developed. This is an applied study classified as the descriptive- correlation study. The sample covers 89 listed firms on the Tehran Stock Exchange during a period over 2007 to 2011. The collected data is analyzed by using multivariate regression executed in EVIEWS software. The findings reveal that there is a significant association between the capital structures of the selected industry and the product market competition. Additionally, applying Tobin’s Q and Herfindahl-Hirschman index as the indexes to measure the competitiveness in the product market does not document the significant relationship between product market competition and capital structure. The other findings, however, confirm the nonlinear relationship between Tobin’s Q and capital structure.
Volume (Year): 3 (2013)
Issue (Month): 3 (July)
|Contact details of provider:|| Web page: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kee H. Chung & Stephen W. Pruitt, 1994. "A Simple Approximation of Tobin's q," Financial Management, Financial Management Association, vol. 23(3), Fall.
- Kovenock, Dan & Phillips, Gordon M, 1997.
"Capital Structure and Product Market Behavior: An Examination of Plant Exit and Investment Decisions,"
Review of Financial Studies,
Society for Financial Studies, vol. 10(3), pages 767-803.
- Dan Kovenock & Gordon M Phillips, 1995. "Capital Structure and Product Market Behavior: An Examination of Plant Exit and Investment Decisions," Working Papers 95-4, Center for Economic Studies, U.S. Census Bureau.
- Kovenock, D. & Phillips, G.M., 1995. "Capital Structure and Product Market Behavior: An Examination of Plant Exit and Investment Decisions," UFAE and IAE Working Papers 313.95, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Istaitieh, Abdulaziz & Rodriguez-Fernandez, Jose M., 2006. "Factor-product markets and firm's capital structure: A literature review," Review of Financial Economics, Elsevier, vol. 15(1), pages 49-75.
- H M Bello & M Sepiriti & E M Letete, 2009. "Competition, Market Structure and Market Power in the Insurance Industry in Lesotho," The IUP Journal of Financial Economics, IUP Publications, vol. 0(1), pages 7-21, March.
- Titman, Sheridan & Wessels, Roberto, 1988. " The Determinants of Capital Structure Choice," Journal of Finance, American Finance Association, vol. 43(1), pages 1-19, March.
- Titman, Sheridan, 1984. "The effect of capital structure on a firm's liquidation decision," Journal of Financial Economics, Elsevier, vol. 13(1), pages 137-151, March.
- Sumitra Naha & Malabika Roy, 2011. "Product Market Competition and Capital Structure of Firms: The Indian Evidence," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(2), pages 140-153, July.
- Lindenberg, Eric B & Ross, Stephen A, 1981. "Tobin's q Ratio and Industrial Organization," The Journal of Business, University of Chicago Press, vol. 54(1), pages 1-32, January.
- Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Harris, Milton & Raviv, Artur, 1991. " The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March.
- Raghuram G. Rajan & Luigi Zingales, 1994.
"What Do We Know About Capital Structure? Some Evidence from International Data,"
NBER Working Papers
4875, National Bureau of Economic Research, Inc.
- 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 1421-60, December.
- James H. Scott Jr., 1976. "A Theory of Optimal Capital Structure," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 33-54, Spring.
When requesting a correction, please mention this item's handle: RePEc:hur:ijaraf:v:3:y:2013:i:3:p:221-233. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hassan Danial Aslam)
If references are entirely missing, you can add them using this form.