The Relationship between Capital Structure Decisions with Firm Performance: Comparison between Big and Small Industries in Firms listed at Tehran Stock Exchange

Goal: till now many researches have been done in investigating the relationship between capital structure decisions with firm performance. But with all, nobody reach to a desirable capital structure that is optimum in each condition. Investigating the relationship between capital structure decisions with firm performance through big and small industries comparison in firms listed at Tehran stock exchange is the goal of this research. Method: this research investigate the capital structure with performance of firms listed at Tehran stock exchange, capital structure as dependent variable contain ratio of short term debts to total assets, ratio of long term debts to total assets and ratio of total debts to total assets. Also, performance as independent variable includes Tobin’s Q ratio and firm size control variable. In order to this, sample contain 81 firms through listed firms in Tehran stock exchange has been chosen that is studied comparatively between big and small industries in four groups of industry during 2005- 2011. Car and basic metals industry and minerals and foods industries consider as big and small industries respectively. In this area, with this method, any research hasn’t been done yet. Findings and conclusions: results of analyzing data show that there is positive and significant relationship between capital structure and firm performance. Significant level of F statistic represent that all regression model are valid. Also, amounts of adjusted determinant coefficient in each three models indicate that more than 60% of Tobin’s Q (dependent variable) changes are explained by research control and independent variables. ?