Which Approach will be Used by Company Managers of Various Industries in Working Capital Financing?

• Main Authors: Shokrollah Khajavi, Akram Fathali, Alireza Pourgoudarzi
• Format: Article
• Language: fas
• Published: University of Tehran 2018-12-01
• Series: تحقیقات مالی
• Subjects: financing; financing hierarchy theory; seemingly unrelated regression; working capital
• Online Access: https://jfr.ut.ac.ir/article_70024_cffad7a5366946eb3446d4b6c2738019.pdf

<strong>Objective:</strong> This research is looking forward to study how working capital financing is confirmed by various industries companies’ managers of Tehran Stock Exchange, focusing on financing hierarchy theory. The research investigates data from 2007 to 2017. <br /><strong>Methods:</strong> Through purposive sampling, a sample of size including 170 companies in nine different categories was selected. The statistical methods of research were SUR and OLS regression. <br /><strong>Results:</strong> The SUR test results hold that if liabilities are considered in general, it can be concluded that financing hierarch theory is not regarded in any of the industries; while, if liabilities are divided to short-term and long-term categories, financing hierarchy theory will be observed in three categories of food, chemical and petroleum and machinery industries, ignoring short-term liabilities. Moreover, OLS regression test results show that financing hierarchy theory is regarded by managers within food, chemical and petroleum and machinery industries. <br /><strong>Conclusion:</strong> The results of the research showed that the managers of some industries observe the financial hierarchy theory in working capital financing. Thus, in general, the results indicate that company mangers in various industries do not pursue the same approach in their financing decisions. <br />