{"title":"Nonlinear relationship between institutional investors' ownership and capital structure: evidence from Iranian firms","authors":"M. Ashrafi","doi":"10.1504/IJMFA.2019.10019091","DOIUrl":null,"url":null,"abstract":"The main objective of this study is to examine how institutional investors and different types of them influence the firms' capital structure. Using a panel data including 240 the main market Iranian firms from 2012 to 2016, the results of this study show that there is a nonlinear relationship between institutional ownership and capital structure. First, we look for a quadratic relationship but we did not find any evidence to support it. Further, we test for a cubic association in the next stage. The results reveal a cubic relationship between institutional ownership and capital structure but this association is different for different types of institutional investors. Pressure-sensitive institutions have positive, negative and again positive influence; while inversely pressure-insensitive institutions have a negative, positive and again negative impact on debt ratio in different levels of their ownership.","PeriodicalId":43684,"journal":{"name":"International Journal of Managerial and Financial Accounting","volume":null,"pages":null},"PeriodicalIF":1.2000,"publicationDate":"2019-02-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Managerial and Financial Accounting","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1504/IJMFA.2019.10019091","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 2
Abstract
The main objective of this study is to examine how institutional investors and different types of them influence the firms' capital structure. Using a panel data including 240 the main market Iranian firms from 2012 to 2016, the results of this study show that there is a nonlinear relationship between institutional ownership and capital structure. First, we look for a quadratic relationship but we did not find any evidence to support it. Further, we test for a cubic association in the next stage. The results reveal a cubic relationship between institutional ownership and capital structure but this association is different for different types of institutional investors. Pressure-sensitive institutions have positive, negative and again positive influence; while inversely pressure-insensitive institutions have a negative, positive and again negative impact on debt ratio in different levels of their ownership.
期刊介绍：
IJMFA covers all aspects of managerial and financial accounting. The key difference between managerial and financial accounting is that managerial accounting information is aimed at helping managers within the organisation, while financial accounting is aimed at providing information to external parties. In today''s advanced manufacturing environment, various issues arise for accounting standard-setting practicing professionals. Solving the separate issues of managerial and financial accounting is a significant challenge, and IJMFA assists researchers in overcoming these challenges in an efficient, effective manner.
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