The Effect of Family Ownership on the Adjustment Speed of Financial Leverage towards Optimal Leverage

Faster attainment of optimal financial leverage guarantees the company's survival and the growth of shareholders' interests. This paper investigates the effect of family ownership on the speed of adjustment of financial leverage toward optimal leverage. The data of ۱۳۳ companies listed on the Tehran Stock Exchange, selected according to the systematic exclusion pattern, was collected for ۱۰ years from ۲۰۱۲ to ۲۰۲۱ to achieve the research objectives. A multivariate linear regression model was used to test the research hypotheses. In order to measure the speed of adjustment of financial leverage, the partial adjustment pattern model of Öztekin (۲۰۱۵) has been used, and to evaluate the Family Ownership, Chen et al. (۲۰۰۸) method was used. The results showed that the speed of adjustment of financial leverage towards optimal leverage in family companies is faster than in non-family companies. Therefore, family owners in companies with a higher sense of responsibility towards the company's capital can create a safe environment for investors and ensure a return on their investment.

Keywords:

Adjustment Speed of financial leverage , Capital structure , Family and non-family Ownership , Optimal leverage