The Effect of Family Ownership and Operating Leverage on Debt Capacity in Listed companies on Tehran Stock Exchange

fahime delfan¹ vahab rostami²

1) payam noor tehran.rey and acunting
2) payam noor tehran.zangan

IOI Code : XDAA-EGZCB
Publication : 2 nd- Scientific Research Conference on Management, Economics and Accounting(cmeaconf.com)
Abstract :
    In family companies, due to the specific ownership structure of these companies, the family interests are prioritized over the interests of the shareholders. As a result, as minority shareholders have less access to essential company information, there is always a risk that the benefits will be felt. This group is at particular risk in the long run. In this regard, the purpose of this study is to explain the effect of family ownership and operating leverage on debt capacity in listed companies on Tehran Stock Exchange. In an effort to respond to this issue, 732 firm-year (122 firms for six years) observation gathered from the annual financial reports of listed companies on Tehran Stock Exchange from 2011 to 2017 have been tested. The research findings show that operating leverage is a significant negative effect on debt capacity. However, the presence of family owners has a significant positive effect on debt capacity. The results also show that the presence of family owners has a significant negative impact on the relationship between operating leverage and debt capacity, in other words, the presence of family owners reduces the negative impact of operating leverage on debt capacity.

Keywords : family ownership operating leverage debt capacity