Examining stock liquidity and excess financial leverage: The role of agency costs in Tehran Stock Exchange Firms

Document Type : Original Article

Authors

1 Department of Accounting, Faculty of Accounting, Tonekabon Branch, Islamic Azad University, Tonekabon, Iran.

2 Department of Management and Accounting, Tonekabon Branch, Islamic Azad University, Tonekabon, Iran.

Abstract
Purpose: In recent years, the emergence of innovative financial instruments in capital markets has not only increased the attractiveness of these markets for investors but has also led to advancements in financial knowledge, particularly in the field of behavioral finance. Given the importance of familiarity with this domain alongside technical and fundamental analysis, this research investigates the relationship between stock liquidity and excess financial leverage, considering the moderating role of agency costs in companies listed on the Tehran Stock Exchange.
Methodology: This study is descriptive-correlational in nature. The required data were collected using the systematic elimination method for the period from 2017 to 2023.
Findings: The findings indicate a significant relationship between stock liquidity and excess financial leverage. However, the moderating role of agency costs in this relationship was not confirmed.
Originality/Value: The results of this research can be highly valuable for policymakers, managers, and investors in improving financial decision-making and optimizing capital structure management. By examining the moderating role of agency costs, this study contributes to a better understanding of the relationship between stock liquidity and excess financial leverage.

Keywords

Subjects


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