Examining the effect of product market competition on capital structure adjustment speed considering the moderating role of CEO extroversion

Subject Areas : Financial Markets and Institutions

Mahdi Filsaraei ¹

1 - Department of Accounting, Hakim Toos Higher Education institute, Mashhad, Iran.

Received: 2023-04-28 Accepted : 2023-08-12 Published : 2023-06-22

Keywords: product market competition, CEO Extroversion, Capital Structure Adjustment Speed,

Abstract :

Objective: This research aims to examine the relationship between market competition, CEO extraversion, and the speed of capital structure adjustment in the capital market.Research Methodology: This study is applied in terms of its objective, quantitative in terms of data, deductive in terms of logic, and descriptive-correlational in terms of execution. The preferred method for gathering evidence is post-event. Relationships between variables have been examined using correlation and multiple regression models with a panel data approach. The study employs data from 143 publicly traded companies on the Tehran Stock Exchange during the period from 2012 to 2021. Company data is analyzed and processed using the R software, and multiple regression is used to estimate the research model.Findings: Data analysis results, using multiple regression with a panel data approach at an expected error level of five percent, reveal a significant relationship between market competition and the speed of capital structure adjustment. Furthermore, CEO extraversion strengthens the relationship between market competition and the speed of capital structure adjustment.Originality/Scientific Contribution: The findings of this research not only contribute to the literature on capital structure adjustment speed and market competition but also assist all stakeholders and users in assessing companies' attention to the impact of market competition and capital structure adjustment speed using the theories of limited liability and opportunistic behavior. Additionally, this relationship is analyzed and dissected based on the personality type of the CEO (extraversion). No previous domestic studies have investigated the effect of CEO extraversion on the speed of capital structure adjustment. Therefore, this research is innovative within the country.

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