The Impacts of Financial Structure on Financial Performance of Banks listed in Tehran Stock Exchange: An Empirical Application

Subject Areas : Financial Mathematics

Esmaeil Balouei ¹ , Ali Asghar Anvary Rostamy ² , Seyyed Jalal Sadeghi Sharif ³ , Ali Saeedi ⁴

1 - Department of Financial Management, Faculty of Management, UAE Branch, Islamic Azad University, Dubai, UAE.
2 - Department of Planning & Management, Tarbiat Modres University, Tehran, Iran.
3 - Faculty of Management & Accounting, Shahid Beheshti, University, Tehran, Iran
4 - Department of Accounting, Faculty of Management, Tehran Northen Branch, Islamic Azad University, , Tehran, Iran

Received: 2018-12-08 Accepted : 2018-12-08 Published : 2018-09-01

Keywords: Tehran Stock Exchange, ROE, Financial Structure, ROA,

Abstract :

Financial structure is a combination of debt and equity and regards as one of the most important issues in banking industry. The purpose of financial structure decision is to create an appropriate combination of financing resources to minimize the cost of capital and thus maximize the company's market value. This study investigates the impacts of banks financial structure on their Returns (ROA and ROE). In addition, it investigates the moderating roles of corporate governance, financial constraints, capital intensity and size. This research is an applied descriptive correlational research. To test the hypotheses, unbalanced panel data is used. The financial data extracted from “Rah Avarde Novin" software and the database of "Tadbir Pardaz" company. The statistical population includes all banks listed on Tehran Stock Exchange during the years 2009 to 2016. The results indicate a positive significant impacts of financial structure and the banks’ ROA and ROE. Moreover, the results show that capital intensity and the size significantly moderate the relation between financial structure with ROA and ROE.

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