The Effect of CEO Duality on the Capital Structure: Evidence from the Tehran Stock Exchange

Existence CEO Duality in the company will cause to increase the powers of CEO that the lack of separation of chairman and CEO duties may lead to reduce the effectiveness of the supervisory role of board and provide the field of the violation of the beneficiaries’ rights. Therefore the present study investigates the effect of CEO duality on the capital structure of listed companies in Tehran Stock Exchange. For this purpose, a sample of 665 firm-years during the period 2006-2010 was selected to test the main hypothesis of the study. The results suggest that there is significant and positive relationship between the CEO duality and capital structure of companies. In addition, the test results of research control variables showed that there is significant and negative relationship between return on assets and tangible asset ratio with debt ratio of the company. But there is significant and negative relationship between business risk and firm size with capital structure.