Investigating the impact of competition in the product market on the relationship between investment opportunities and capital structures of listed companies in the Tehran stock exchange

The present study primarily aims to investigate the effects of competition in the product market on the relationship between investment opportunities and capital structures at listed companies in the Tehran stock exchange during 2014­2018. For this purpose, the capital structure was treated as the dependent variable, while investment opportunities were considered as the independent variable. Also, the product market competition was selected as the moderating variable. The operation cycle, company size, accrual ratio, and operational cash flow ratio were employed as control variables. The statistical population consisted of 132 companies that were selected by the systematic removal method. The present study employed a descriptive-correlation methodology with a practical approach. The library data collection method was utilized to collect data, while the statement document mining method was applied to test the research hypotheses. Statistical techniques employed for data analysis were correlation and multiple regression methods.

The testing results of the hypotheses revealed an inverse and significant relationship between investment opportunities and the capital structure. It was also found that competition in the product market improved the inverse relationship between investment opportunities and the capital structure. The results of the control variables suggested an inverse and significant relationship between the company size and capital structure. Furthermore, the operation cycle and accrual ratio were observed to have direct and significant relationships with the capital structure.