Analysis of Financial Leverage, Operating Leverage and Capital Venture Effect on Tobin's Q Ratio of Investment and Holding Companies Listed in Tehran Stock Exchange

Document Type : Research Paper


1 Department Management and Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran

2 Department of Accounting, Natanz Branch, Islamic Azad University, Natanz, Iran


The main purpose of this research is the study on effect of Financial and Operating Leverage and Venture Capital on Tobin's Q ratio amongst companies listed in Tehran Stock Exchange. In this research, the Holdings and Investment companies are used as statistical samples and 73 enterprises that are listed in Tehran Stock Exchange within 2001 to 2016 have been studied. The results driven by this research show that Venture Capital, hereafter called "VC", and Operating Leverage, hereafter called "OPL", are positively related to Tobin's Q ratio while Financial Leverage, hereafter called "FL", has negative relation. At the same time, combined variables “FL” and “VC” are negatively correlated with Tobin's Q ratio and combined variable “OPL” and “VC” are neutral on Tobin's Q ratio. The effect estimation of independent variables, namely FL, OPL and VC and control variables, over dependent variable of Tobin's Q ratio is 55%, which is in fact noticeable.


Main Subjects

[1] Dahiyat A., Does Liquidity and Solvency Affect Banks Profitability? Evidence from Listed Banks in Jordan. International Journal of Academic Research in Accounting, Finance and Management Science, 2016, 6(1), P.35–40.      
[2] Asadzadeh H., Study of financial leverage effect on profitability and ROE, Master thesis, Islamic Azad University, Marvdasht Branch, 2014.
[3] Darabi R., Molaei, A., Effect of variables of liquidity, inflation, capital protection and gross domestic product on profitability of Mellat Bank, Financial science magazine, 2011, 10, P.234-255.
[4] Fabozzi F.J., Handbook of Finance, Volume 1, Financial Markets and Instrument, Jong Wiley & Sons, 2008, P.561-573.
[5] Hosseini Z., Defining of economic leverage degree power to sensitivity ratio test and company performance measurement. Case study: Iran Khodro Diesel. PhD. thesis Islamic Azad University, Oloom & Tahghighat Branch, 2009.
[6] Hosseini Z., Investigation of the Effect of Financial Leverage and Free Cash Flow on Diversification of Stocks and Financial Performance of Listed Companies, Financial strategy journal, 2015, 24, P.12-35.
[7] Jafar F., Investigation of Financial, Operating and Combined Leverage and Their Effect on Adjusted ROE Based on Risk, study samples: Tehran Stock Exchange listed companies. Conference of Management, 2013.
[8] Kashanipour M., Rasaeian A., Review of Relationship Between ROE and Performance Evaluation Criterion, Humanities and social science magazine,  2007, 25, P.23-45.
[9] Leewillen W. G., Badernet S. G., On the Measurement of Tobin`s Q, Journal of Financial Economics, 1977, 44 (1), P.77-122.
[10] Nagi S., Venture capital or private equity? The Asian experience, Journal of Business Horizons, 2007, 50, P.335-344.
[11] Qaderi K., Qaderi S., Qaderzadeh S.K., Investigation of Liquidity Effect on Companies Profitability, bounds technic approach, Accounting and Auditing Science Journal, 3rd year, 2014, 9, P. 24-55.
[12] Salmab M., Determinants of Capital Structure of Banks in Ghana: An Empirical Approach, Baltic Journal of Management, 2015, 2(1), P.67-79.
[13] Taleb T., The study of relationship between liquidity and financial leverage on Return of Companies Listed in Tehran Stock Exchange (Automotive, chemical and pharmaceutical industry), master thesis, Islamic Azad University, Neishabour Branch, Humanities faculty, 2016.
[14] Tit, K., Emerging markets clean up their act, Journal of Euro money, 2006, 37(442), P.158-160.
[15] Yang K. X., Hongxing W., Venture capital, financial leverage and enterprise performance, 2017, 3(1), P.66-105.
[16] Zhang J., The Relationship Between Working Capital Management and The Corporate Cash Holdings, University of Eastern Finland, Faculty of Social Sciences and Business Studies, Master’s thesis, 2011, 67, P. 223-245.