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JANUARY 2012
VOL 3, NO 9

INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Inter-Industry differences in capital structure and product market competition: Evidence from Iranian companies
Mehdi Abzari Professor , University of Isfahan, Iran
Faculty of Administrative Science & Economics Department of Management

Saeed Fathi Assistant Professor, University of Isfahan, Iran
Faculty of Administrative Science & Economics Department of Management

Arineh Torosian Graduate student, (Corresponding author)
University of Isfahan, Iran Faculty of Administrative Science & Economics Department of Management

Abstract The purpose of this paper is to investigate empirically the existence of inter- industry differences in the capital structure and product market competition of corporations listed in Tehran Stock Exchange. We study an balanced panel dataset of 603 firm-year observations in 8 industries from 2001 to 2009. The technique used for this is one way analysis of variance. Employing this parametric method, this study finds that there are significant differences in the debt ratios and product market competition across different industries. Keywords: Industry Effect; Capital Structure; Product Market Competition; Market Structure 1. Introduction The relationship between industry membership and capital structure has received considerable attention. The industry in which a firm operates is likely to have a significant effect on its capital structure. Besides the corporate capital structure characteristics like non-debt tax shields, research and development, fixed assets, individual products that are parts that sum to a whole; Kahle and Walking (1996) noted four additional applications of industrial classification. They are applied, first to identify control firms within the same industry; second, to describe the industrial composition of the sample; third, to filter firms for specific investigations; and fourth to determine whether...

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