Ownership Structure, Capital Structure, and Firm Survival

Abstract

This study investigates the influence of ownership structure and capital structure on the survival of firms on Iran's stock market from 2005 to 2015. Firm survival is measured in terms of the exit of the firm “i” in year “t” from among 484 firms listed in the Tehran Stock Exchange. We have used a binary logistic regression method to test the hypotheses. The results reveal a significant inverse relationship between capital structure and firm survival and between major ownership and firm survival on the stock market, as well as a significant direct relationship between institutional ownership and firm survival. Thus, firms with a higher ratio of debt to assets have a higher probability of survival. However, those with a higher ratio of institutional ownership are less likely to survive.