The Effects of Global Economic Crisis on Capital Structure: Empirical Evidence from Tehran Stock Exchange (TSE)

Abstract The global economy faces crisis every so often. In recent years, the financial crisis has affected the global economy; all countries, directly or indirectly, are involved. The purpose of this research is to study the impact of the global economic crisis on the capital structure of listed companies in Tehran Stock Exchange. To test this effect, 87 companies listed in Tehran Stock Exchange during the period 2008- 2012 have been studied. In this study, earnings before interest and tax, depreciation expense, assets, research and development expenses, and global economic crisis are used as the independent variables. The book debt ratios and the market debt ratios are used as the dependent variables (the capital structure). The results suggest a significant relationship between the global economic crisis and the market debt ratios but not the book debt ratios.