THE EFFECT Of AGENCY COSTS on THE RELATIONSHIP BETWEEN FINANCIAL LEVERAGE and COMPETITION with FINANCIAL DISTRESS
The effect of agency costs on the relationship between financial leverage and competition with financial distress
Subject Areas : Management Accounting
Masoud Gholamzadeh Ledari
1
,
Parvin Sadri
2
,
Hanieh Darabi
3
1 - Assistant Professor, Department of Finance and Accounting, Faculty of Management and Economic, Science and Research Branch, Islamic Azad University, Tehran, Iran. (Corresponding Author)
2 - Assistant Professor, Department of Accounting, Faculty of Humanities, Saveh Branch, Islamic Azad University, Markazi, Iran
3 - MSc in financial management, Department of Finance and Accounting, Faculty of Management and Economic, Science and Research Branch, Islamic Azad University, Tehran, Iran
Keywords: agency costs , financial leverage , competition , financial distress,
Abstract :
In this research, the effect of agency costs as the moderating variable on 1) relationship between leverage and distress and 2) relationship between competition and distress, is examined. For this purpose, 180 companies were selected during the period of 2015 - 2019 list on Tehran Stock Exchange (TSE). This research based on purpose is applied research and according to descriptive-correlation method Multivariate regression model were used to test hypotheses. Results revealed that there is a positive and significant relationship between financial leverage and financial distress, but competition does not have a significant relationship with financial distress. Also, the results of the research indicate that the agency costs have a positive and significant effect on the relationship between financial leverage and competition with financial distress.
