MODELING THE RELATIONSHIP BETWEEN PROFITABILITY AND CAPITAL STRUCTURE IN TSE WITH GENERALIZED METHOD OF MOMENT PANEL) APPROACH

Q: How can I download an article?

To download an article from SID, first log in to the site, search for the article title, and click on the 'Download Article' option.

Q: How can I download an ISI article?

To download an ISI article on SID, enter the keyword or article title in the search bar, view the relevant results, click on the desired article, and select the 'Download Article' option.

Q: How can I access the SID database?

To access the SID database, visit SID.ir, create an account, and log in to access scientific resources.

Q: Is downloading articles from SID free?

Some articles on SID are available for free, while others require payment. Details are specified on the article's page.

SHAHDANI M.S.; CHAVOSHI K.; MOHSENI H.

مرکز اطلاعات علمی Scientific Information Database (SID) - Trusted Source for Research and Academic Resources

Journal Paper

Paper Information

Journal: FINANCIAL ENGINEERING AND SECURITIES MANAGEMENT (PORTFOLIO MANAGEMENT) Year:2012 | Volume:3 | Issue:11 Page(s): 17-42

Download Full-Text

Persian Verion

View:

1,235

Download:

Cites:

Information Journal Paper

Title

MODELING THE RELATIONSHIP BETWEEN PROFITABILITY AND CAPITAL STRUCTURE IN TSE WITH GENERALIZED METHOD OF MOMENT PANEL) APPROACH

Author(s)

SHAHDANI M.S. | CHAVOSHI K. | MOHSENI H. | Issue Writer Certificate

Keywords

CAPITAL STRUCTUREQ2

PROFITABILITYQ2

PECKING ORDER THEORYQ1

GENERAL METHOD OF MOMENTSQ2

Abstract

Surely one of the most important topics for financial economists is to identify the relationship between PROFITABILITY and corporate financing decisions or CAPITAL STRUCTURE. Optimal CAPITAL STRUCTUREs will maximum value of the company and should minimum cost of capital. Financial economics are always in challenge to achieve optimal CAPITAL STRUCTURE and maximum PROFITABILITY. This research analyzes the relationship between CAPITAL STRUCTURE and PROFITABILITY of listed companies in Tehran Stock Exchange (TSE) based on Generalized Method of Moment (GMM) panel approach. In this research we use financial statements (balance sheet and profit and loss account) of selected companies that listed in TSE during the five year period (2006 to 2011) as balanced panel data set.In order to test the hypothesis, first we use pooled regression to determinant the relationship between CAPITAL STRUCTURE and PROFITABILITY. Then we use panel data set to achieve more efficient estimation. After employing chow and hasman test, we selected fixed effect panel data model.Our results from linear mood suggest that the relationship between leverage and market structure isnegativedue to the complex interaction of market conditions and Problems based on debt financing (in terms of rate of intake facilities and PROFITABILITY of projects) in the companies. Our evidence shows that Tehran listed companies are generally more subjected to PECKING ORDER THEORY that means profitable companies tend to use internal financing than debt financing.Finally, we employed GMM method to reach on more efficient result and accounts for unobservable firm-specific characteristics and endogeneity problems. The results show a saucer-shaped (U shape) relationship between CAPITAL STRUCTURE and PROFITABILITY and also combined interpretation of theories in three stages (low, average and high PROFITABILITY) is more efficient

Cites

No record.

References

Cite

APA: Copy

SHAHDANI, M.S., CHAVOSHI, K., & MOHSENI, H.. (2012). MODELING THE RELATIONSHIP BETWEEN PROFITABILITY AND CAPITAL STRUCTURE IN TSE WITH GENERALIZED METHOD OF MOMENT PANEL) APPROACH. FINANCIAL ENGINEERING AND SECURITIES MANAGEMENT (PORTFOLIO MANAGEMENT), 3(11), 17-42. SID. https://sid.ir/paper/197898/en

Vancouver: Copy

SHAHDANI M.S., CHAVOSHI K., MOHSENI H.. MODELING THE RELATIONSHIP BETWEEN PROFITABILITY AND CAPITAL STRUCTURE IN TSE WITH GENERALIZED METHOD OF MOMENT PANEL) APPROACH. FINANCIAL ENGINEERING AND SECURITIES MANAGEMENT (PORTFOLIO MANAGEMENT)[Internet]. 2012;3(11):17-42. Available from: https://sid.ir/paper/197898/en

IEEE: Copy

M.S. SHAHDANI, K. CHAVOSHI, and H. MOHSENI, “MODELING THE RELATIONSHIP BETWEEN PROFITABILITY AND CAPITAL STRUCTURE IN TSE WITH GENERALIZED METHOD OF MOMENT PANEL) APPROACH,” FINANCIAL ENGINEERING AND SECURITIES MANAGEMENT (PORTFOLIO MANAGEMENT), vol. 3, no. 11, pp. 17–42, 2012, [Online]. Available: https://sid.ir/paper/197898/en

Related Journal Papers