Investigating the nonlinear relationship between capital structure and firm's size with profitability and dividend policy for firms listed in Tehran stock exchange

Eghdami, Elham; Tahriri, Arash; Saadati, Ehsan

Investigating the nonlinear relationship between capital structure and firm's size with profitability and dividend policy for firms listed in Tehran stock exchange

Document Type : Original Article

Authors

Elham Eghdami ¹

Arash Tahriri ²

Ehsan Saadati ³

¹ Master of Accountancy Islamic Azad University - Karaj Unit

² Assistant Prof, Department of Accounting, University of Tehran, Tehran, Iran

³ Ph.D. Student in Accounting ,Branch of Damavand, Islamic Azad University, Tehran, Iran

Abstract

Investigating the nonlinear relationship between capital structure and firm's size with profitability and dividend policy for firms listed in Tehran stock exchange
Abstract
The current study tries to investigate the nonlinear relationship between capital structure & firm's size with profitability and dividend policy of listed companies in Tehran Stock Exchange in a 7 years period between 2010-2017. The sample of current research consists of 129 firms, which were listed in Tehran stock exchange; in addition, it is descriptive-correlational research. Study's background data and literature had been collected by using library studies. In order to analyze the data, we applied nonlinear regression with econometric software E-views and STATA. The results of this research show that there is a meaningful non-linear relationship between firm size, profitability and dividends. Therefore according to political cost process which is one of components of positive theories of accounting, such relationship can be explained. In addition, there is meaningful nonlinear relationship between equity structure with profitability and dividends according to the other results of research.
Keywords :Capital structure, Firm's size, Profitability, Dividend policy

Keywords

Capital structure

Firm's size

Profitability

Dividend policy