The Effect of Mimetic Behavior of Peer Companies on Capital Structure of Listed Companies in Tehran Stock Exchange

Abstract

The purpose of this study is to investigate the effect of mimetic behavior of peer companies on capital structure of companies listed in Tehran Stock Exchange during 2006 to 2016. The multivariate linear regression model was used to test the hypothesis. Based on the systematic elimination method, 126 companies in 11 industries were selected. The statistical method in this research was panel data methods. The results show that the average of industry external finance, average of industry net income ratio, the average of industry market to book ratio and the average of industry volatility net profit do not affect the company's capital structure. But, the average logarithm of industry net sales affects the company's debt structure. In general, the results suggest that there is not mimetic behavior in peer companies to external finance in companies listed in Tehran Stock Exchange.

Keywords

• Peer Company
• Capital Structure
• Agency Theory and Mimetic Behavior