Accounting and Auditing Research

Accounting and Auditing Research

The Study of the Role of Information Asymmetry in Capital Structure Decisions for Corporations Listed in Tehran Stock Exchange (TSE)

Document Type : Original Article

Authors
Mohammad Kashanipoor 1
Abolfazl Momeni Yanesari 2
1 Assistant Professor, Faculty of Economic and Administrative Science at Mazandaran University, Department of Accounting
2 Master of Science Student, Payam Noor University of Behshahr
10.22034/iaar.2012.104682
Abstract
In this paper the role of information asymmetry in the capital structure decisions through augmenting the Rajan and Zingales Model and using a sample data of 60 corporations listed in Tehran stock exchange (TSE) during 1382-1386 has been examined. To measure capital structure (debt ratios) as dependent variables ,We used the ratios of: total debt to  total equity, total debt to  total assets, short-term debt to  total assets and long-term debt to  total assets, we also used the  relative bid-ask Spread as a proxy for information asymmetry. To test the hypothesis, we used the multivariate linear regression models based on Panel data technique. We also used the T-static and F-static tests to test the statistical significance of coefficients and models respectively. Our findings indicate that there is a positive and significant relationship between information asymmetry and 3 measures of capital structure namely, the ratios of total debt to  total equity, total debt to  total assets and short-term debt to  total assets. However according to obtained results there is no significant relationship between information asymmetry and the ratio of long-term debt to total assets.
Keywords
: Information Asymmetry
Bid-Ask Spread
Capital Structure
Debt Ratios
Accounting and Auditing Research
Volume 4, Issue 14
Summer 2012
Pages 4-19