A Comparative Study of Factors Affecting the Speed of Adjustment of Capital Structure among the Industries of the Tehran Stock Exchange

Companies, depending on their specific characteristics, face different capital structure adjustment costs and, as a result, move to their target leverage at different speeds. The purpose of this study is a comparative investigation of factors affecting the speed of capital structure adjustment among service companies and manufacturing industries listed on the Tehran Stock Exchange. To test the hypotheses, the information of 137 companies listed on the Tehran Stock Exchange in the period 2013-2019 has been used. After calculating the research variables, a panel data regression model was used to test the hypotheses. To choose between the methods of regression data models the Limer F test was used. The panel data model was selected and the results of the Hausman test also confirmed the use of the fixed effects model. The results of the study hypotheses showed that capital structure adjustment speed of manufacturing industries is larger than service companies. The estimated speed is 73% for service companies and 85% for manufacturing industries, which indicates the high speed of adjustment which can reduce the probability of financial crises in the economy.