Journal of Economic Modeling Research

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  In recent years, financial economists have increasingly recognized the interaction between market structure and capital structure or financial decisions of the firms.

  This research analyzes the relationship between market structure (power) and the capital structure (leverage ratio) of listed companies in Tehran Stock Exchange (TSE) based on static and dynamic approach. In this research we study a balanced panel dataset of 101 firm-year observations from 2006 to2010 and test significant relationship for testing hypothesis.

  First we use pooled regression to determinant the relationship between capital structure, market structure (Tobin's Q) and five control variables including profitability, size, collateral value of assets, growth rate of assets and uniqueness of assets. After employing chow and hausman test, we selected fixed effect panel data model. Also we employed GMM method to have more efficient result and also to cope with the unobservable firm-specific characteristics and endogeneity problems.

  Our results suggest that the relationship between leverage and market structure is non-linear (cubic) due to the complex interaction of market conditions, agency problems and bankruptcy costs. The study finds a negative relationship between capital structure and profitability and also positive relation between capital structure and the size. So, profitable companies tend to use internal financing such as retained earnings and issuing new shares instead of debt financing. Also big companies prefer to use more leverage due to desirable conditions for getting loans. Our evidence shows that Iranian listed companies are generally more subject to agency cost theory (limited liability effect) and tax shield theory. Finally, the system-GMM results reveal that managers of Iranian firms tend to adjust dynamically their leverage ratios over time.

 

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In the current structure of world economy, imports play an important role in the economic development strategy. Although taking the suitable policies for the imports of goods and services is important, but taking the correct strategy is subject to factors affecting imports. In the most of empirical studies, imports are a function of real income and real exchange rate. So, the effect of income inequality on imports of goods and services has less been investigated. Whereas, increase in income inequality causes an increase in the purchasing power of high income people and demand for imported luxury goods and also causes a change in the composition of domestic and imported consuming goods. This study examine the effect of income inequality on import of goods and services in 17 developed countries and 18 developing countries in the period 1990-2010 using generalized method of moment (GMM) analysis. The results indicate that there is a positive relationship between income inequality and imports of goods and services in developed countries while this relation is negative in developing countries. Furthermore, the relationship between GDP and imports of goods and services is positive in both groups of countries, while the relationship between real exchange rate and imports of goods and services is negative in both groups. Thus, policy makers should redistribute income and wealth in favor of the low income people and motivate them to participate in the production sectors, reduce the inequality gap and improve their competitiveness power in the market and enhance the income from the abroad.

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The structure-conduct-performance (SCP) paradigm has constituted an enduring empirical tradition in empirical industrial economics and has the advantage of clarifying the basic building blocks of the competitive mechanisms. This paper presents a SCP model to estimate causes and effects in Iranian manufacturing industry in 2009. The model used in this paper is a system of four simultaneous equations: agglomeration as the standard measure of structure, advertising and R&D as the standard measure of conduct and profitability as the standard measure of performance. Using the data from a sample of Iranian industries, three-stage least squares results indicate that: a) Advertisement has positive and significant impacts on agglomeration and profitability. b) Profitability has positive and significant impacts on agglomeration and advertisement. c) Agglomeration has positive and significant impact on profitability and also a negative impact on advertisement.