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Studying of Financial Structure of Iranian Listed Company by Using a Partial Adjustment Model and Separation of Micro and Macro Factors

Shahabuddini, Hamid | 2013

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 44115 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Nili, Farhad; Abedini, Javad
  7. Abstract:
  8. Financial structure of firm is a determinant of firm’s cost of capital. Cost of capital is a determinant of firm value, so studding of Factors affecting the financial structure has become one of the most important topics in the financial economics in recent decades. Theoretical studies relating to the financial structure of firm have generally been aimed to studying the determinants of optimal financial structure. Empirical studies have also focused to studying the relationship between observed financial leverage and a set of explanatory variables. This approach has two major shortcomings. First, the observed leverage deviates from the optimal leverage. Second, the empirical analyses are static. To solve these shortcomings, in this research, the firm's financial structure has been studied by dynamic partial adjustment model. Also, the explanatory variables are separated in micro and macro variables. Based on the research results in addition to firm characteristics, macroeconomic variables also have a significant influence on firm’s financial structure. Also, as expected, the financial structure of large firms and small and medium-sized firms, because of differences in financing constraints they have faced, are different. While financial structure of large firms is counter-cyclical, the financial structure of smaller firms is pro-cyclical. Moreover, financial development and stock market boom, only has positive and significant impact on the financial structure of small and medium-sized firms
  9. Keywords:
  10. Financial Development ; Financial Structure ; Capital Cost ; Partial Adjusment Model ; Business Cycle

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