The Study of the Relationship between Products Diversity Strategy and the Capital Structure Components with the Performance of the Listed Companies on Tehran Stock Exchange

Document Type : Research Paper

Authors

1 Mazandaran University

2 Tarbiat Modares University

3 Islamic Azad University of Noor, Noor, Iran

Abstract

This study aims to investigate the relationship between products diversity strategy and the capital structure components with the performance of companies listed on the Tehran Stock Exchange. A total of 107 companies listed on the Tehran Stock Exchange from 2008 to 2013 were studied. We used Entropy criteria to measure diversification. Furthermore, we measured capital structure with four ratios (ratio of total debt, long-term debt, current debt to total assets and debt to equity ratio) and the performance with return on assets. The results show that products diversity strategy is negatively and significantly associated with return on assets. In addition, we found that the ratio of total debt to equity is negatively and significantly related to return on assets, but there are insignificant relationship between other ratios and return on assets.

Keywords

Main Subjects

References

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Journal of Asset Management and Financing
Volume 4, Issue 2 - Serial Number 13
September 2016
Pages 65-76

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