Investigating the Impact of Market Timing on the Capital Structure of Companies in Tehran Stock Market

Mohajeri, Parisa; Taleblou, Reza; Rahnama, Aylar

doi:10.22099/ijes.2020.34169.1591

	Investigating the Impact of Market Timing on the Capital Structure of Companies in Tehran Stock Market
Iranian Journal of Economic Studies
مقاله 2، دوره 9، شماره 2 - شماره پیاپی 18، اسفند 2020، صفحه 359-375 اصل مقاله (301.42 K)
نوع مقاله: Research Paper
شناسه دیجیتال (DOI): 10.22099/ijes.2020.34169.1591
نویسندگان
Parisa Mohajeri؛ Reza Taleblou^* ؛ Aylar Rahnama
Faculty of Economics, Allameh Tabatabai University, Tehran, Iran
چکیده
Based on the theory of market timing in the framework of capital structure, the time of issuing stock depends on the stock prices. In that way, managers are issuing shares that have a high ratio of market value to book value. In fact, issuing shares is in the best interest of the firm when the company's stock in the market is more than actually valued. In this paper, by using panel data of 55 firms listed in the Tehran Stock Market during the 2003 to 2018, we investigate the impact of market timing on capital structure. The estimated model in this paper is a partial dynamic model using the Generalized Method of Moment (GMM) and Arrelano-Band Estimates. The findings indicate that: one- market timing has affected the firm`s capital structure of Tehran Stock Exchange.Two- market condition has a significant negative effect on capital structure which means that in the hot markets, managers issue more equity and less debt. Three- firm size and tangible assets have significant positive effects on leverage ratio. In fact, the larger firms with more tangible assets face lower default risks, thus they have relatively more debt. Four- profitability variable influences corporate leverage negatively. Five-sanction and exchange rate variables have negative significant effects on capital structure.
کلیدواژه‌ها
Capital Structure؛ Finance؛ Market Timing؛ Initial Public Offering

مراجع
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Investigating the Impact of Market Timing on the Capital Structure of Companies in Tehran Stock Market