Corporate Financing Strategies in Normal and Crisis Conditions: Evidence from Tehran Stock Exchange

This research investigates the financing strategies of companies under normal and the economic crisis conditions over the years 2003-2016.

The statistical population of this research consists of companies listed on the Tehran Stock Exchange and Iran Over-The-Counter market (OTC). Research hypotheses have been tested through Multivariate Regression Equation.

The findings indicate that in both normal and crisis periods, the ROA (Return on Assets) and size of the company have a positive impact on the financing through the stock market. In addition, despite the negative impacts of sales growth, profitability, and average financial leverage on equity financing, tangible assets and market risk fail to indicate any effect on it. The results also demonstrate that the ROA and size of the company have negative effects on financing through the debt market over both normal and crisis periods. In addition, notwithstanding the negative impact of sales growth during the crisis period on debt financing, this effect is positive in the normal condition. Moreover, profitability and financial leverage have positive effects on debt financing during both normal and crisis times. Finally, it has been revealed that tangible assets have a positive impact on debt financing during the crisis period, but a negative effect during the normal period. Market risk has no effect on debt financing.